(1) Existing provisions of the California Constitution require the Governor to submit annually to the Legislature, and prescribe procedures for the Legislature to enact and send to the Governor, a Budget Bill for each fiscal year.
This measure would provide, commencing in the 2004–05 fiscal year, that if, following the enactment of the annual Budget Bill, the Governor determines that General Fund revenues will decline substantially below the estimate of General Fund revenues upon which the Budget Bill for that fiscal year, as enacted, was based, as described below, or that General Fund expenditures will increase substantially above that estimate of General Fund revenues, or both, the Governor may issue a proclamation declaring a fiscal emergency and the Governor shall thereupon cause the Legislature to assemble in special session for this purpose. The proclamation would identify the nature of the fiscal emergency and be accompanied by proposed legislation to address the fiscal emergency. It would provide that if the Legislature fails to pass and send to the Governor a bill or bills to address the fiscal emergency by the 45th day following the issuance of the proclamation, the Legislature may not act on any other bills, nor may the Legislature adjourn for a joint recess, until that bill or those bills have been passed and sent to the Governor.
(2) Existing provisions of the California Constitution require the Governor to submit to the Legislature a budget, as specified.
This measure would prohibit the Legislature from sending to the Governor for consideration, and the Governor from signing into law, a Budget Bill for the 2004–05 fiscal year or any subsequent fiscal year that would appropriate from the General Fund, for that fiscal year, a total amount that, when combined with all appropriations from the General Fund for that fiscal year made as of the date of the Budget Bill’s passage and the amount of any General Fund moneys transferred for the fiscal year to the Budget Stabilization Account described in (3) below, exceeds General Fund revenues for that fiscal year estimated as of the date of the Budget Bill’s passage as set forth in the Budget Bill.
(3) Existing provisions of the California Constitution require the Legislature to establish a prudent state reserve fund in an amount the Legislature deems reasonable and necessary.
This measure would, in addition, establish the Budget Stabilization Account in the General Fund and would require the Controller, commencing no later than September 30, 2006, and for each fiscal year thereafter to transfer from the General Fund to the account a specified percentage of estimated General Fund revenues. In each fiscal year the first 50% of these funds, up to $5,000,000,000 in the aggregate, would be deposited in a specified subaccount and continuously appropriated to the Treasurer to supplement the retirement of bonded indebtedness incurred under the measure described in (4) below. This measure would authorize the transfer to the General Fund, as specified, of other funds in the account, and funds remaining in the subaccount after the indebtedness is retired. The Governor would be authorized to reduce or suspend that transfer for any fiscal year by executive order.
(4) Existing provisions of the California Constitution prohibit the creation by the Legislature of debts in excess of $300,000 except for a single object or work specified in a law creating the debt, which is approved by a2/3 vote of the members of each house of the Legislature and approved by the people by a majority of the votes cast at a general or direct primary election.
This measure would, for the purposes of those provisions, define a “single object or work,” for which the Legislature may create a debt or liability in excess of $300,000 subject to those requirements, to include the funding of an accumulated state budget deficit, as defined, pursuant to a specified bond measure submitted to the voters at the March 2, 2004, statewide primary election. This measure would prohibit the state from obtaining moneys, as specified, to fund a year-end state budget deficit subsequent to the issuance of any state bonds pursuant to that bond measure.
(5) This measure would provide that its provisions would become operative only if the specified bond measure is submitted to and approved by the voters at the March 2, 2004, statewide primary election.