BILL ANALYSIS Ó
SENATE COMMITTEE ON ELECTIONS
AND CONSTITUTIONAL AMENDMENTS
Senator Lou Correa, Chair
BILL NO: AB 65 HEARING DATE:
7/5/11
AUTHOR: GATTO ANALYSIS BY:
Darren Chesin
AMENDED: 6/27/11
FISCAL: YES
SUBJECT
Statewide ballot pamphlet: ballot measures: revenue
DESCRIPTION
Existing law requires the proponents of a proposed
initiative measure to submit the text of the proposed
measure to the Attorney General (AG) with a written request
that a circulating title and summary of the measure be
prepared, prior to circulating the petition for signatures.
Existing law requires that the AG shall, in boldface print,
include in the circulating title and summary either the
estimate of the amount of any increase or decrease in
revenues or costs to the state or local government, or an
opinion as to whether or not a substantial net change in
state or local finances would result if the proposed
initiative is adopted. This fiscal estimate or opinion
must be made jointly by the Department of Finance (DOF) and
the Joint Legislative Budget Committee (JLBC).
Existing law specifies what information must be included in
the statewide ballot pamphlet, including, but not limited
to:
A complete copy of each measure.
A copy of the arguments and rebuttals for and against
each state measure.
A copy of the analysis of each state measure by the
Legislative Analyst.
Tables of contents, indexes, art work, graphics, and
other materials that the Secretary of State (SOS)
determines will make the ballot pamphlet easier to
understand or more useful for the average voter.
Existing law requires the Legislative Analyst's fiscal
analysis for the ballot pamphlet to state whether the
measure would result in increased or decreased costs to the
state and an estimate of those costs or savings. The
analysis must be written in clear and concise terms, so as
to be easily understood by the average voter, and must
avoid the use of technical terms wherever possible.
Existing law , pursuant to the California Constitution,
provides that the Legislature may amend or repeal an
initiative statute by another statute that becomes
effective only when approved by the electors unless the
initiative statute permits amendment or repeal without the
electors' approval.
This bill would require that if an initiative measure is
determined in the joint analysis of the JLBC and the DOF to
provide new revenues for new or existing programs, the
following paragraph shall be provided to the AG which may
be included in the circulating title and summary for
appearance on the petition:
"The revenue generated by this measure will be
irrevocably and forever dedicated to the purposes specified
in the measure unless the measure is amended by the
electors or amended in another manner provided for in the
measure."
This bill also requires that the aforementioned paragraph
must be included in the analysis of each measure by the
Legislative Analyst appearing in the statewide ballot
pamphlet. However, if the initiative measure provides that
the new revenues are to be deposited without restriction
into the General Fund commencing at a future date after its
enactment, the paragraph shall not appear in either the
petition or the ballot pamphlet.
BACKGROUND
Current Procedure for Determining Initiative Fiscal Impact .
While the DOF and the JLBC are required to prepare the
joint estimate of the fiscal impact on state and local
government that's included in all initiative titles and
summaries submitted to the AG's office, the actual process
differs. When the DOF and JLBC receive notice from the AG
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requesting a fiscal analysis, the Legislative Analyst's
Office (LAO) usually always takes the lead and begins the
process of investigative research, including how programs
would be affected and how possible passage and
implementation would impact the state as a whole. Once the
LAO has completed this investigative analysis, the DOF is
then contacted for review and concurrence. After the DOF
has signed off on the LAO's work, the estimate is then
returned to the AG for inclusion in the title and summary.
Initiative Spending . According to the LAO, in recent
years, there have been a number of approved propositions
which have guaranteed that a certain portion of General
Fund spending be dedicated to a specific purpose. These
measures restrict the Legislature's ability to alter the
relative shares of General Fund spending provided to
program areas in any given year. For instance, Proposition
98 of 1988 provided for a minimum level of total spending
(General Fund and local property taxes combined) on K-14
education in any given year. The required General Fund
contribution is roughly 40 percent of the state's budget.
Proposition 49 of 2002 required that the state spend a
certain amount (currently $550 million) on after-school
programs.
Other States . According to the National Conference of
State Legislatures (NCSL), as of 2006 the following eleven
states have restrictions on the use of the initiative with
regard to appropriations and funding mechanisms.
Alaska: No dedication of revenues or making or repealing
appropriations.
Arizona: If an initiative requires a reduction in
government revenue or a reallocation from currently
funded programs, the initiative text must identify the
program(s) whose funding must be cut or eliminated to
implement the initiative. If the identified revenue
source provided fails in any fiscal year to fund the
entire mandated expenditure for that fiscal year, the
legislature may reduce the expenditure of state revenues
for that purpose in that fiscal year to the amount of
funding supplied by the identified revenue source.
Florida: Measures that propose a tax or fee not in place
in November, 1994 require a 2/3 vote to pass.
Maine: Expenditures in an amount in excess of available
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and unappropriated state funds remain inoperative until
45 days after the regular legislative session, unless the
measure provides for raising new revenues adequate for
its operation.
Massachusetts: May not be used to make a specific
appropriation from the treasury. However, if such a law,
approved by the people, is not repealed, the legislature
must raise by taxation or otherwise and appropriate such
money as may be necessary to carry such law into effect.
Mississippi: Sponsor must identify in the text of the
initiative the amount and source of revenue required to
implement the initiative. Initiatives requiring a
reduction in government revenue or a reallocation from
currently funded programs must identify the program(s)
whose funding must be reduced or eliminated to implement
the initiative.
Missouri: May not appropriate money other than new
revenues created and provided for by the initiative.
Montana: May not appropriate money.
Nebraska: No measure may interfere with the
legislature's ability to direct taxation of necessary
revenues for the state and its governmental subdivisions.
Nevada: No appropriations or other expenditures of money
unless such statute or amendment also imposes a
sufficient tax or otherwise constitutionally provides for
raising the necessary revenue.
North Dakota: No appropriations for the support and
maintenance of state departments and institutions.
Wyoming: No dedication of revenues or making or repealing
appropriations.
The NCSL further comments that initiative measures which
mandate the expenditures of large amounts of public revenue
without including a new dedicated revenue source (such as
taxes or fees) can make it difficult for the legislature to
continue to fund existing state services and programs. In
addition, initiatives that increase or create new taxes to
fund new or existing programs negatively affect the
legislature's ability to impose reasonable taxes to fund
necessary programs for citizens.
COMMENTS
1. According to the author , AB 65 seeks to help create
this better informed citizenry by giving voters more
information when considering initiatives on the ballot.
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With more groups opting to bypass the legislative
process and use initiatives to shape public policy, it
becomes more important to provide the decision makers,
voters, with the most information possible.
This measure would ask the Attorney General and Secretary
of State to provide more information to Californians
about initiatives that create new revenue sources.
Specifically, it would direct that the Attorney General
include in the petition to qualify, the following
disclaimer if the proposed initiative creates a new
funding source that does not provide for an eventual
direction of those funds to the State's General Fund:
"The revenue generated by this measure will be
irrevocably and forever dedicated to the purposes
specified in this measure unless the measure is amended
by the electors or amended in another manner provided
for in this measure."
It would direct the Secretary of State to include in the
statewide voter pamphlet the same disclaimer in the
analysis of an initiative measure.
All too often, voters are unaware of the intersection
between the initiative process and the budget process.
There is a lack of understanding that revenue streams
created via the initiative process are essentially put
into silos, untouchable by the legislature during the
budget process. Unless these initiatives say otherwise,
the monies go into special funds that cannot be used
for anything but programs specified in the initiative.
This especially comes to light during tough budget
times such as now when the public wonders why the
legislature simply cannot shift certain monies from
special funds into the state's general fund to help
fund. This simple disclosure would help make clear to
voters the possible outcomes and exactly what is, or
isn't, possible with revenue streams created by an
initiative.
It is in the best interest of voters to know, up-front,
about the conditions of their approval for such
initiatives. Not only would it help them make more
informed decisions at the ballot box, but it would also
give them a better understanding of the constraints of
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the budget process, helping explain why certain funds
can't easily be shifted to help deal with budget
deficits.
2. May v. Shall . This bill provides that the paragraph
provided to the AG may be in an initiative petition but
shall appear in the in statewide ballot pamphlet. Is
this the author's intent?
3. Please Pass the Dictionary . Existing law requires
the Legislative Analyst's analyses that appear in the
ballot pamphlet to be written so that they are easily
understood by the average voter. In order to comply
with that mandate, the author and committee may wish to
consider amending this bill to make the required
disclosure paragraph easier for the average voter to
understand. Staff suggests the following, alternative
wording:
"The funds raised by this measure will always be used
for the purposes described in this measure unless the
law is changed in the future by the voters or in
another way if permitted by this measure."
4. Related Legislation . AB 1021 (Gordon) which passed
this committee and is now pending in the Senate
Committee on Appropriations, requires additional
information be included in petitions and the ballot
pamphlet for initiatives that result in costs over $1
million but do not provide for additional funding. SCA
4 (DeSaulnier) which also passed this committee and is
now pending on the Senate Floor, would prohibit an
initiative measure that will result in a net increase
in state or local government costs other than costs
attributable to the issuance, sale, or repayment of
bonds, from being submitted to the electors or having
an effect unless and until the Legislative Analyst and
the Director of Finance jointly determine that the
initiative measure provides for additional revenues in
an amount that meets or exceeds the net increase in
costs.
PRIOR ACTION
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Assembly Elections and Redistricting Committee: 5-1
Assembly Appropriations Committee: 11-5
Assembly Floor: 51-24
Note : This bill was completely rewritten in the Senate
therefore the Assembly votes do not reflect the current
version of the bill.
POSITIONS
Sponsor: Author
Support: None received
Oppose: None received
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