California Proposition 71, State Government Spending Limitations (June 1988)

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California Proposition 71, or the Government Spending Limitation and Accountability Act, was on the June 7, 1988 statewide primary ballot in California as an initiated constitutional amendment, where it was defeated.

Proposition 71 would have put a limit on the annual rate of growth allowed in the California state government's budget and in the budgets of local units of government in the state. The limit would have allowed these budgets to grow at a rate no larger than "cost of living" and increases in population.

Election results

Proposition 71
ResultVotesPercentage
Defeatedd No2,662,46351.13%
Yes 2,544,731 48.87%

Constitutional changes

California Constitution
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Preamble
Articles
IIIIIIIVVVI
VIIVIIIIXXXA
XBXIXIIXIIIXIII A
XIII BXIII CXIII DXIVXVXVIXVIIIXIXXIX AXIX BXIX C
XXXXIXXII
XXXIVXXXV

If Proposition 71 had been enacted, it would have:

Text of measure

Title

The ballot title was:

Appropriations Limit Adjustment. Initiative Constitutional Amendment.

Summary

The official summary said:

Constitution limits tax revenues state and local governments annually appropriate for expenditure: allows "cost of living" and "population" changes. "Cost of living" defined as lesser of change in US Consumer Price Index or per capita personal income; measure redefines as greater of change in California Consumer Price Index or per capita personal income. "State population" redefined: includes increases in K-12 or community college average daily attendance greater than state population growth. Local government "population" redefined: includes increases in residents and persons employed. Specifies motor vehicle and fuel taxes are fees excluded from appropriations limit.

Fiscal impact

See also: Fiscal impact statement

The fiscal estimate provided by the California Legislative Analyst's Office said:

"Change in the appropriations limit inflation adjustment will allow increased state appropriations of up to $700 million in 1988-89, and increasing amounts annually thereafter. Change in the population adjustment will allow further undetermined increase in state appropriations. State's ability to appropriate additional funds as a result of increased state limit is dependent on receipt of sufficient revenue. Based on estimates contained in Governor's Budget, state revenues will not be sufficient in 1988-89 to fund any additional appropriations allowed by this measure. In future years, economy's performance will determine whether and to what extent state revenues will be available to fund such additional appropriations. Local government and school district appropriation limits will be increased by unknown but significant amounts. Change in the treatment of state transportation-related revenues would have no fiscal effect because of the limit adjustment formula."

The LAO added these additional details about the possible fiscal impact:

  • "This measure increases the appropriations limits of all government entities in California. As a result, governments may be able to spend or retain tax proceeds which under current law could be subject to return to taxpayers."
  • "The change in the inflation adjustment will allow increased state appropriations of up to $700 million in 1988-89, and increasing amounts annually thereafter. The change in the population adjustment factor will allow a further increase in state appropriations, but the size of the change cannot be determined at this time. The ability of the state to appropriate additional funds as a result of the increased state limit is dependent on the receipt of sufficient revenue. Based on the estimates contained in the Governor's Budget, state revenues will not be sufficient in 1988-89 to fund any additional appropriations allowed by this measure. In future years, the economy's performance will determine whether and to what extent state revenues will be available to fund such additional appropriations."
  • "The appropriations limits of local governments and school districts also will be increased by unknown but significant amounts."
  • "The change in the treatment of state transportation-related revenues would have no fiscal effect because of the limit adjustment formula contained in this measure."
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