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SCA-2 Expenditure limits.(2003-2004)

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SCA2:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2003–2004 5th Ext.

Senate Constitutional Amendment
No. 2

Introduced  by  Senator Brulte

December 03, 2003

A resolution to propose to the people of the State of California an amendment to the Constitution of the State, by adding Article IV A thereto, relating to expenditure limits.


LEGISLATIVE COUNSEL'S DIGEST


SCA 2, as introduced, Brulte. Expenditure limits.
(1) Existing provisions of the California Constitution prohibit the annual appropriations subject to limitation, as defined, of any entity of state or local government from exceeding its adjusted annual appropriations limit, and direct that excess revenues be applied to educational funding and tax reductions, as specified.
This measure would, for the 2004–05 fiscal year, prohibit, with certain specified exceptions, expenditures of General Fund revenues from exceeding the amount of General Fund revenues estimated by the Director of Finance in the May Revision for the proposed budget for the 2004–05 fiscal year. It would, for the 2005–06 fiscal year and each subsequent fiscal year, prohibit, with those exceptions, total expenditures of General Fund revenues from exceeding the expenditure limit established pursuant to the measure for the prior fiscal year by more than the change in the cost of living and the change in population, as specified.
The measure would provide for the transfer of any General Fund revenues for a fiscal year that exceed the General Fund expenditure limit, as well as any General Fund revenues received in any prior fiscal year that are available for expenditure, into the Budget Stabilization Fund, which would be established in the State Treasury. The measure would authorize the Legislature to transfer funds from the Budget Stabilization Fund to the General Fund, in an amount not to exceed the difference, in a fiscal year in which the Director of Finance estimates that available General Fund revenues will fall below the allowable General Fund expenditures for that fiscal year, or to appropriate those funds to provide rebates to the taxpayers, to provide for payments on state deficit financing bonds, or for expenditures relating to an emergency declared by the Governor, as specified.
(2) Existing provisions of the California Constitution authorize the Governor, on extraordinary occasions, to cause the Legislature to convene in special session.
This measure would require the Director of Finance, on and after July 1, 2004, if the director estimates that General Fund revenues for the current fiscal year will be exceeded by the expenditures from the General Fund for that fiscal year or that expenditures for the current fiscal year will exceed the limit established by the measure, to so inform the Governor. The measure would provide that if the Governor determines that it is necessary to revise existing laws in order to eliminate this deficit or to bring estimated expenditures into compliance with the limit established by the measure, the Governor may declare a fiscal emergency and by proclamation cause the Legislature to assemble in special session. The measure would require the Governor, concurrent with issuing the proclamation, to submit to both houses of the Legislature a fiscal recovery plan, in the form of one or more bills to reduce General Fund spending or make other changes in law, to eliminate the deficit or to reduce estimate expenditures, as applicable. The measure would specify that the plan would take effect immediately within 30 calendar days after the date that it is transmitted to the Legislature unless, prior to that date, the Legislature passes legislation by a 2/3 vote of each house, containing the declaration that the changes in law set forth in that legislation will eliminate the deficit or reduce estimated expenditures, as applicable, and sends that legislation to the Governor.
(3) This measure would provide that its provisions shall become operative only if the California Deficit Recovery General Obligation Bond Act of 2004 is submitted to and approved by the voters at the March 2, 2004, statewide election.
Vote: 2/3   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  
Resolved by the Senate, the Assembly concurring, That the Legislature of the State of California at its 2003–04 Fifth Extraordinary Session commencing on the eighteenth day of November 2003, two-thirds of the membership of each house concurring, hereby proposes to the people of the State of California that the Constitution of the State be amended by adding Article IV A thereto, to read:
ARTICLE IV A
SPENDING STABILIZATION
SECTION 1.(a) (1) For the 2004–05 fiscal year, total expenditures of General Fund revenues may not exceed the amount of General Fund revenues estimated by the Director of Finance in the May Revision for the proposed budget for the 2004–05 fiscal year. For the 2005–06 fiscal year and each subsequent fiscal year, total expenditures of General Fund revenues may not exceed the expenditure limit established pursuant to this article for the prior fiscal year by more than the change in the cost of living and the change in population, as those changes are calculated pursuant to Section 1 of Article XIII B.
(2) For purposes of the determination of allowable expenditures pursuant to this article, General Fund revenues do not include transfers or deposits into the General Fund for which there exists an obligation of repayment, or General Fund revenues received by the State in any prior fiscal year.
(b) If the financial responsibility of providing services is transferred, in whole or in part, from a local governmental agency to an agency of state government, the amount of allowable General Fund expenditures for a fiscal year determined pursuant to this article shall increase by an amount equal to the annual expense, as of the time of the transfer, represented by the financial responsibility transferred.
(c) (1) If the General Fund revenue source for the provision of services is permanently replaced, in whole or in part, by any other revenue source, the amount of allowable General Fund expenditures determined pursuant to this article shall decrease by an amount equal to the amount replaced by the other revenue source.
(2) If any other revenue source for the provision of services is permanently replaced, in whole or in part, by General Fund revenues, the amount of allowable General Fund expenditures determined pursuant to this article shall increase by an amount equal to the amount replaced by General Fund revenues.
SEC. 2.(a) If, for the 2004–05 fiscal year, or any subsequent fiscal year, the Director of Finance determines that General Fund revenues exceed allowable General Fund expenditures for that fiscal year as determined pursuant to this article, those excess revenues shall be transferred into the Budget Stabilization Fund, which is hereby established in the State Treasury. Any General Fund revenues received in any prior fiscal year that are available for expenditure shall also be deposited into the fund. Any unexpended balance in the fund, including any interest earnings, shall carry over from one year to the next.
(b) (1) Moneys in the Budget Stabilization Fund may be expended pursuant to a statute passed in each house of the Legislature by rollcall vote entered into the journal, two-thirds of the membership concurring, that appropriates those moneys for any of the following purposes:
(A) To provide rebates to the taxpayers of this State.
(B) To provide for payments on state deficit financing bonds authorized pursuant to Sections 1 and 1.3 of Article XVI.
(C) For expenditures relating to an emergency declared by the Governor.
(2) Moneys expended from the fund pursuant to this subdivision shall not be subject to the limitation established under this article, nor shall they be included in the expenditure base for any fiscal year for purposes of determining the limitation for any subsequent fiscal year.
(c) In a fiscal year in which the Director of Finance estimates that available General Fund revenues will fall below the allowable General Fund expenditures determined pursuant to this article, the Legislature may, by a statute passed in each house by rollcall vote entered into the journal, two-thirds of the membership concurring, transfer funds from the Budget Stabilization Fund to the General Fund in an amount not exceeding that difference.
(d) Notwithstanding Section 5 of Article XIII B or any other provision of this Constitution, General Fund revenues transferred to the Budget Stabilization Fund pursuant to subdivision (a) shall not be subject to limitation under Article XIII B until a fiscal year in which those moneys are transferred from that fund to the General Fund pursuant to subdivision (c).
(e) General Fund revenues transferred to the Budget Stabilization Fund pursuant to subdivision (a) are not General Fund revenues or General Fund proceeds of taxes for purposes of Section 8 of Article XVI until a fiscal year in which those moneys are transferred from that fund to the General Fund pursuant to subdivision (c).
SEC. 3.On and after July 1, 2004, if the Director of Finance estimates either (a) that General Fund revenues for the current fiscal year will be exceeded by expenditures from the General Fund for that fiscal year, or (b) that expenditures for the current fiscal year will exceed the limit established by Section 1, the director shall so inform the Governor. If the Governor determines that it is necessary to revise existing laws in order to eliminate this deficit or to bring estimated expenditures into compliance with Section 1, he or she may declare a fiscal emergency and by proclamation cause the Legislature to assemble in special session pursuant to subdivision (b) of Section 3 of Article IV. Concurrent with issuing that proclamation, the Governor shall submit to both houses of the Legislature a fiscal recovery plan, in the form of one or more bills to reduce General Fund spending or make other changes in law, to eliminate the deficit or to reduce estimated expenditures, as applicable. The plan shall take effect immediately as a statute within 30 calendar days after the date that it is transmitted to the Legislature unless, prior to that date, legislation is passed in each house of the Legislature by rollcall vote entered into the journal, two-thirds of the membership concurring, and is sent to the Governor, containing the declaration that the changes in law set forth in that legislation will eliminate the deficit or reduce estimated expenditures, as applicable.
SEC. 4.The provisions of this article are deemed, in the event of any conflict, to supersede the provisions of Article XIII B.
SEC. 5.This article shall become operative only if the California Deficit Recovery General Obligation Bond Act of 2004 is submitted to and approved by the voters at the March 2, 2004, statewide election.