California Proposition 111 (1990)
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California Proposition 111 was on the June 5, 1990 ballot in California as an legislatively-referred constitutional amendment, where it was approved. It was also known as the Traffic Congestion Relief And Spending Limitation Act Of 1990.
- Yes: 2,621,022 (52.43%)
- No: 2,378,028 (47.57%)
Proposition 111 enacted a 55% increase in truck weight fees and a five-cent-per gallon increase in the state's fuel tax effective August 1, 1990, with an additional one cent tax starting on January 1 for each of the next four years. It changed how the appropriations limit and the minimum funding guarantee for public schools works. It also changed several laws relating to transportation funding.
Proposition 111 made some changes to Proposition 98 which had passed two years earlier as an initiated constitutional amendment, as well as to the Gann Spending Limit of 1979.[1]
Impact on Gann Limit
Although Proposition 111 was primarily advertised as a proposition that would end freeway congestion, the proposition also reconfigured the way the state's Gann Limit was calculated. The Gann Limit came about through a ballot initiative approved in 1979. It limited state government spending to the percentage change in inflation and population growth or the change in per capita personal income, whichever was lower.[2]
Constitutional changes
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Proposition 111 changed Article XIII B of the California Constitution in several places:
- Amending Section 1
- Adding Section 1.5
- Amending Section 2
- Amending Subdivision (c) of Section 3
- Amending Section 8
- Amending Section 9
- Amending Section 10.5
Proposition 111 also changed Article XVI, California Constitution in two places:
- Amending Section 8
- Amending Section 8.5
Ballot summary
Proposition 111's official ballot summary said, "This measure would enact a statewide traffic congestion relief program and update the spending limit on state and local government to better reflect the needs of a growing California population. It would provide new revenues to be used to reduce traffic congestion by building state highways, local streets and roads, and public mass transit facilities. This measure would enact a 55% increase in truck weight fees and a five-cent-per-gallon increase in the fuel tax on August 1, 1990, and an additional one cent on January 1 of each of the next four years. This measure updates the state appropriations limit to allow for new funding for congestion relief, mass transit, health care, services for the elderly, and other priority state programs, while still providing an overall limit on state and local spending. This measure would continue to provide that public education and community colleges receive at least 40% of the state General Fund budget, and would provide that revenues in excess of the state appropriations limit are allocated equally between education and taxpayers."
Fiscal impact
The fiscal estimate provided by the California Legislative Analyst's Office said:
- The fiscal effects of this measure will, to a large extent, depend on future economic conditions in the state. The estimates discussed below reflect the economic conditions assumed in the 1990-91 Governor's Budget, which was released on January 10, 1990.
- Transportation Funding Changes. Approval of this measure would increase revenues for transportation purposes by $925 million in 1990-91, $1.1 billion in 1991-92 and increasing amounts until 1994-95 as a result of increased state gas taxes and truck weight fees. These revenue increases would be exempt from state and local appropriations limits.
- Changes in the Appropriations Limit Formula. As a result of the proposed changes in the limit adjustment factors, we estimate that this measure would increase the state's appropriations limit by more than $800 million in 1990-91 and unknown amounts annually thereafter. The ability of the state to appropriate additional funds as a result of the increased state limit is dependent on the level of revenues received by the state. In 1990-91 the increase would have no effect on existing spending levels, outside of the transportation program area, because state revenues are expected to be less than the existing limit.
- This measure also will increase local government appropriations limits by an unknown, but probably significant, amount.
- Education Funding Changes. The impact of this measure on education funding will depend on how it affects the amount of the minimum funding guarantee and the amount of excess revenues. Generally speaking, this measure will tend to increase the minimum funding guarantee, because it increases the maintenance-of-effort formula amount, and thus makes it more likely that this formula will determine the amount of the guarantee. At the same time, the changes made by this measure in the appropriations limit adjustment factors will tend to decrease the likelihood that public schools and community colleges would receive excess revenues.
- Using the revenue and economic assumptions contained in the 1990-91 Governor's Budget, we estimate that this measure would have no impact on General Fund costs for public schools and community colleges in 1990-91. This is because the minimum funding guarantee under both current law and under this measure is projected to be determined by the percentage-of- revenues formula (as opposed to the maintenance-of-effort formula), and revenues are expected to be below the state's appropriations limit. The net fiscal effect of this measure with respect to public schools and community colleges in subsequent years is unknown.
- Bond Measure Costs. As noted earlier, Proposition 108 would only take effect if this measure is also approved. As a result, passage of this measure -- in combination with passage of Proposition 108 -- would authorize the state to issue $1 billion in general obligation bonds, which would be paid off from the state's General Fund, over a period of about 20 years. If all of the bonds were sold at an interest rate of 7.5 percent, the cost would be about $1.8 billion to pay off both the principal ($1 billion) and interest ($790 million). The average payment for principal and interest would be about $90 million per year.
Path to ballot
The California State Legislature voted to put Proposition 111 on the ballot via Senate Constitutional Amendment 1 (Statutes of 1989, Resolution Chapter 66).
External links
References
- ↑ Fresno Bee, "Spending limits a tough sell", September 20, 2009
- ↑ San Diego News Network, "Leslie Eastman: Look for the union label", June 30, 2009
