Existing provisions of the California Constitution require that the revenues derived from the general ad valorem property tax be allocated to local jurisdictions in each county in accordance with law. Existing statutory law implementing these provisions requires each county auditor, in each fiscal year, to allocate property tax revenues to local jurisdictions in accordance with specified formulas and procedures, and generally requires that each jurisdiction be allocated an amount equal to the total of the amount of revenue allocated to that jurisdiction in the prior fiscal year, subject to certain modifications, and that jurisdiction’s portion of the annual tax increment, as defined. Existing statutory law reduces the amounts of ad valorem property revenue that would otherwise be annually allocated to the county, cities, and special districts pursuant to these general allocation provisions by requiring, for purposes of determining property tax revenue allocations in each county for the 1992–93 and 1993–94 fiscal years, that the amounts of property tax revenue deemed allocated in the prior fiscal year to the county, cities, and special districts be reduced in accordance with certain formulas. Existing law annually requires that the revenues not allocated to the county, cities, and special districts as a result of these reductions be transferred to the Educational Revenue Augmentation Fund in that county for allocation to school districts, community college districts, and the county office of education.

This measure would modify these reduction and transfer requirements, for the 2002–03 fiscal year and each fiscal year thereafter, by prohibiting the total amount allocated to a county’s Educational Revenue Augmentation Fund from exceeding the applicable percentage, set forth in a specified schedule, of the total amount allocated to that fund for the 2000–01 fiscal year. This measure would further require that the revenues not allocated to the county’s Educational Revenue Augmentation Fund as a result of these limits be instead allocated among the local agencies in the county, as provided, and that the decrease in allocations to a county’s Educational Revenue Augmentation Fund resulting from those limitations be first applied to reduce allocations from that fund to school districts and the county office of education. This measure would also specify that the amount of moneys required by the California Constitution to be applied by the state for the support of school districts and community college districts be determined in that amount that would be determined pursuant to that provision in the absence of this measure.