{"id":246261,"date":"2022-05-22T00:01:00","date_gmt":"2022-05-22T07:01:00","guid":{"rendered":"https:\/\/calmatters.org\/?p=246261"},"modified":"2022-05-19T12:23:18","modified_gmt":"2022-05-19T19:23:18","slug":"california-budget-gann-limit","status":"publish","type":"post","link":"https:\/\/calmatters.org\/_zh\/commentary\/2022\/05\/california-budget-gann-limit\/","title":{"rendered":"How voters put limits on state budget spending"},"content":{"rendered":"

As California\u2019s governor and legislators go through the annual ritual of fashioning a state budget, they must contend with three uber-complex, voter-approved directives that largely dictate how revenues are to be distributed.<\/p>\n\n\n\n

Collectively, they imply that politicians can\u2019t be trusted to spend billions of dollars wisely. The three measures have particular impact when the Capitol is dominated by expansionist-minded Democrats and the treasury is overflowing with tax revenues<\/a>, as it is now.<\/p>\n\n\n\n

The first is the Gann Limit, named for anti-tax gadlfy Paul Gann, a co-author of the iconic Proposition 13 property tax limit. After its passage in 1978, Gann proposed an ideologically similar constraint for the state and found an ally in the governor of the era, Jerry Brown.<\/p>\n\n\n\n

Brown had opposed Proposition 13 as \u201ca ripoff\u201d but after its passage quickly rebranded himself a \u201cborn-again tax cutter\u201d and began campaigning for president as a proponent of balanced federal budgets. To burnish his new image, he called a special election in 1979 to help Gann\u2019s measure, \u547d\u9898 4<\/a>, win voter approval.<\/p>\n\n\n\n

The Gann Limit\u2019s complex language kicked in when certain conditions were met and required excess revenue to either be returned to taxpayers or spent on a few select categories. Eight years after its passage, circumstances triggered its provisions and the Legislature approved a $1.1 billion tax refund \u2013 a very substantial sum in those days.<\/p>\n\n\n\n

The Gann Limit, however, worried those who depended on the state\u2019s budget, particularly the California Teachers Association. The state had taken over school finance in the wake of Proposition 13 and the powerful union wanted to protect education from spending limits and tax cuts. Therefore, in 1988 it persuaded voters to endorse an even more complex ballot measure, Proposition 98<\/a>.<\/p>\n\n\n\n

Essentially, it gives schools first call on state revenues and while its precise effect varies, depending on economic circumstances and other factors, it roughly directs about 40% of general fund spending to schools.<\/p>\n\n\n\n

Voters adopted the third big budget constraint in 2014 with Jerry Brown, once again governor, again playing a seminal role. The budget had become dependent on income taxes from a relative handful of high-income Californians, and their volatility had sparked a boom-and-bust syndrome in the budget process.<\/p>\n\n\n\n

Brown asked voters to raise taxes to solve an immediate budget deficit and then championed \u547d\u9898 2<\/a> to deal with revenue volatility by requiring some revenues to be diverted into a \u201crainy day fund\u201d that could be tapped when revenues declined.<\/p>\n\n\n\n

In the last couple of years, as the wealthy saw huge gains on their investments and their taxes mushroomed, all three of the constitutional directives have affected how the financial bounty could be spent.<\/p>\n\n\n\n

Schools have seen huge gains in state aid, rainy day reserves have swelled and, for the first time in nearly four decades, the Gann Limit has been a factor. Last year saw billions of dollars in \u201cGolden State Stimulus\u201d payments to taxpayers to get around the Gann Limit and Gov. Gavin Newsom and legislators are debating how to shower even more cash on California families this year.<\/p>\n\n\n\n

The Legislature\u2019s budget advisor, Gabe Petek, has warned that the Gann Limit could create a multi-billion-dollar \u201cfiscal cliff\u201d<\/a> by requiring ever-more revenues to be confined to a few categories at the expense of broader spending.<\/p>\n\n\n\n

The Gann Limit grates on those who see the surge of revenues as an opportunity to sharply expand spending on social and medical services, and there\u2019s a nascent effort to change or even repeal it. Newsom says he would support some kind of change, so the saga continues<\/p>","protected":false},"excerpt":{"rendered":"

Three voter-approved provisions of the state constitution have a major impact on how the California state budget is fashioned and they are having a big effect as the state sees a flood of new revenues.<\/p>","protected":false},"author":73,"featured_media":246301,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"single-feature.php","format":"standard","meta":{"_acf_changed":false,"_stopmodifiedupdate":false,"_modified_date":"","newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","apple_news_api_created_at":"2022-05-22T07:01:09Z","apple_news_api_id":"91e57460-6093-4c40-b888-038e5086cd4c","apple_news_api_modified_at":"2022-05-22T07:01:09Z","apple_news_api_revision":"AAAAAAAAAAD\/\/\/\/\/\/\/\/\/\/w==","apple_news_api_share_url":"https:\/\/apple.news\/AkeV0YGCTTEC4iAOOUIbNTA","apple_news_cover_media_provider":"image","apple_news_coverimage":0,"apple_news_coverimage_caption":"","apple_news_cover_video_id":0,"apple_news_cover_video_url":"","apple_news_cover_embedwebvideo_url":"","apple_news_is_hidden":"","apple_news_is_paid":"","apple_news_is_preview":"","apple_news_is_sponsored":"","apple_news_maturity_rating":"","apple_news_metadata":"\"\"","apple_news_pullquote":"","apple_news_pullquote_position":"","apple_news_slug":"","apple_news_sections":[],"apple_news_suppress_video_url":false,"apple_news_use_image_component":false,"_spanish_translation_id":0,"_is_translation":false,"_newspack_byline_active":false,"_newspack_byline":"","newspack_content_restriction_is_exempt":false,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[58,63],"tags":[],"legislator":[],"bill":[],"newspack_spnsrs_tax":[],"coauthors":[4174],"class_list":["post-246261","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-commentary","category-dan-walters","entry"],"acf":[],"apple_news_notices":[],"yoast_head":"\nCalifornia budget: How voters set limits on it - 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He began covering California politics in 1975, just as Jerry Brown began his first stint as governor, and began writing his column in 1981, first for the Sacramento Union for three years, then for The Sacramento Bee for 33 years and now for CalMatters since 2017. Dan is also the author or co-author of two books about California, \u201cThe New California: Facing the 21st Century\u201d and \u201cThe Third House: Lobbyists, Money and Power in Sacramento.\u201d He is a frequent radio show guest and occasionally appears on national television, commenting on California issues. Walters began his career in 1960 at the Humboldt Times in Eureka, California, a month before his 17th birthday, first as a newsroom aide and later as a police beat reporter. Having found his calling, he not only turned down a National Merit college scholarship but dropped out of high school, lacking one required class \u2013 ironically civics \u2013 to qualify for a diploma. Before moving to Sacramento to cover politics, he was the managing editor of three small daily newspapers. He has two adult daughters and three grandsons.","sameAs":["https:\/\/x.com\/DanCALmatters"],"birthDate":"1943-10-10","gender":"Male","jobTitle":"Columnist","worksFor":"CalMatters.org","url":"https:\/\/calmatters.org\/_zh\/author\/dan-walters\/"}]}},"parsely":{"version":"1.1.0","canonical_url":"https:\/\/calmatters.org\/_zh\/commentary\/2022\/05\/california-budget-gann-limit\/","smart_links":{"inbound":0,"outbound":0},"traffic_boost_suggestions_count":0,"meta":{"@context":"https:\/\/schema.org","@type":"NewsArticle","headline":"How voters put limits on state budget spending","url":"http:\/\/calmatters.org\/_zh\/commentary\/2022\/05\/california-budget-gann-limit\/","mainEntityOfPage":{"@type":"WebPage","@id":"http:\/\/calmatters.org\/_zh\/commentary\/2022\/05\/california-budget-gann-limit\/"},"thumbnailUrl":"https:\/\/i0.wp.com\/calmatters.org\/wp-content\/uploads\/2022\/05\/051322-Newsom-Budget-AP-CM-01.jpg?resize=60%2C60&ssl=1","image":{"@type":"ImageObject","url":"https:\/\/i0.wp.com\/calmatters.org\/wp-content\/uploads\/2022\/05\/051322-Newsom-Budget-AP-CM-01.jpg?fit=2000%2C1333&ssl=1"},"articleSection":"Dan Walters","author":[{"@type":"Person","name":"\u4e39\u00b7\u6c83\u5c14\u7279\u65af"}],"creator":["Dan Walters"],"publisher":{"@type":"Organization","name":"\u52a0\u5dde\u4e8b\u52a1","logo":"https:\/\/calmatters.org\/wp-content\/uploads\/2019\/07\/calmatters-logo_2x.png"},"keywords":[],"dateCreated":"2022-05-22T07:01:00Z","datePublished":"2022-05-22T07:01:00Z","dateModified":"2022-05-22T07:01:00Z"},"rendered":"<meta name=\"parsely-title\" content=\"How voters put limits on state budget spending\" \/>\n<meta name=\"parsely-link\" content=\"http:\/\/calmatters.org\/_zh\/commentary\/2022\/05\/california-budget-gann-limit\/\" \/>\n<meta name=\"parsely-type\" content=\"post\" \/>\n<meta name=\"parsely-image-url\" content=\"https:\/\/i0.wp.com\/calmatters.org\/wp-content\/uploads\/2022\/05\/051322-Newsom-Budget-AP-CM-01.jpg?resize=60%2C60&ssl=1\" \/>\n<meta name=\"parsely-pub-date\" content=\"2022-05-22T07:01:00Z\" \/>\n<meta name=\"parsely-section\" content=\"Dan Walters\" \/>\n<meta name=\"parsely-author\" content=\"Dan Walters\" \/>","tracker_url":"https:\/\/cdn.parsely.com\/keys\/calmatters.org\/p.js"},"jetpack_featured_media_url":"https:\/\/i0.wp.com\/calmatters.org\/wp-content\/uploads\/2022\/05\/051322-Newsom-Budget-AP-CM-01.jpg?fit=2000%2C1333&ssl=1","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/calmatters.org\/_zh\/wp-json\/wp\/v2\/posts\/246261","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/calmatters.org\/_zh\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/calmatters.org\/_zh\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/calmatters.org\/_zh\/wp-json\/wp\/v2\/users\/73"}],"replies":[{"embeddable":true,"href":"https:\/\/calmatters.org\/_zh\/wp-json\/wp\/v2\/comments?post=246261"}],"version-history":[{"count":3,"href":"https:\/\/calmatters.org\/_zh\/wp-json\/wp\/v2\/posts\/246261\/revisions"}],"predecessor-version":[{"id":246302,"href":"https:\/\/calmatters.org\/_zh\/wp-json\/wp\/v2\/posts\/246261\/revisions\/246302"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/calmatters.org\/_zh\/wp-json\/wp\/v2\/media\/246301"}],"wp:attachment":[{"href":"https:\/\/calmatters.org\/_zh\/wp-json\/wp\/v2\/media?parent=246261"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/calmatters.org\/_zh\/wp-json\/wp\/v2\/categories?post=246261"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/calmatters.org\/_zh\/wp-json\/wp\/v2\/tags?post=246261"},{"taxonomy":"legislator","embeddable":true,"href":"https:\/\/calmatters.org\/_zh\/wp-json\/wp\/v2\/legislator?post=246261"},{"taxonomy":"bill","embeddable":true,"href":"https:\/\/calmatters.org\/_zh\/wp-json\/wp\/v2\/bill?post=246261"},{"taxonomy":"newspack_spnsrs_tax","embeddable":true,"href":"https:\/\/calmatters.org\/_zh\/wp-json\/wp\/v2\/newspack_spnsrs_tax?post=246261"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/calmatters.org\/_zh\/wp-json\/wp\/v2\/coauthors?post=246261"}],"curies":[{"name":"\u53ef\u6e7f\u6027\u7c89\u5242","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}