BILL ANALYSIS Ó AB 1021 Page 1 ASSEMBLY THIRD READING AB 1021 (Gordon) As Amended May 19, 2011 Majority vote ELECTIONS 5-2 APPROPRIATIONS 12-5 ----------------------------------------------------------------- |Ayes:|Fong, Bonilla, Hall, |Ayes:|Fuentes, Blumenfield, | | |Mendoza, Swanson | |Bradford, Charles | | | | |Calderon, Campos, Davis, | | | | |Gatto, Hall, Hill, Lara, | | | | |Mitchell, Solorio | | | | | | |-----+--------------------------+-----+--------------------------| |Nays:|Logue, Valadao |Nays:|Harkey, Donnelly, | | | | |Nielsen, Smyth, Wagner | ----------------------------------------------------------------- SUMMARY : Requires additional fiscal information be included in the circulating title and summary prepared by the Attorney General (AG) and the summary statements prepared by the Legislative Analyst for a proposed initiative measure. Specifically, this bill : 1)Requires - if determined by the Joint Legislative Budget Committee (JLBC) and Department of Finance (DOF) in their joint analysis of a proposed initiative that has been submitted for a circulating title and summary, that the measure would: a) establish a new or expanded program; b) cost more than $1 million per year, excluding costs attributable to the issuance, sale, or repayment of general obligation bonds; and, c) not provide new revenues or eliminate all or part of existing programs sufficient to pay the cost of the new or expanded program or service - that a paragraph, as specified, be provided to the AG that may be included in the title and summary. 2)Requires - if determined by the Legislative Analyst (LA) that a measure which has qualified for the ballot would: a) establish a new or expanded program; b) cost more than $1 million per year, excluding costs attributable to the issuance, sale, or repayment of general obligation bonds; and, c) not provide new revenues or eliminate all or part of existing programs sufficient to pay the cost of the new or expanded program or service - that a paragraph be added to the summary statements. AB 1021 Page 2 3)Provides that the paragraphs submitted by the JLBC and DOF and the LA state that it has been determined "? this measure does not include sufficient funds to pay the cost of the new program or expanded program or service provided therein. Therefore, should the measure pass, its cost would have to be paid from one or more of the following: 1) Reductions to existing state programs. 2) Revenue increases. 3) State reserves, if available." 1)Makes other conforming changes. FISCAL EFFECT : According to the Assembly Appropriations Committee, negligible fiscal impact. For every additional page required in the state ballot pamphlet, the cost is $66,000. However, the Secretary of State's (SOS) office formats the Voter Information Guide in 16-page increments, thus there is often blank space available for additional information. Moreover, additional pages would likely not be necessary solely to include the additional language specified in this bill. EXISTING LAW : 1)Requires the AG to include in the circulating title and summary, in boldface print, either the fiscal estimate of the amount of any increase or decrease in revenues or costs to the state or local government prepared by the DOF and the JLBC, 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. 2)Requires the LA to prepare an impartial analysis of each proposed measure describing the measure and including a fiscal analysis of the measure showing the amount of any increase or decrease in revenue or cost to state or local government. Provides that if a proposed measure is estimated to result in increased cost to the state, the estimate of those costs be set out in boldface print in the ballot pamphlet. 3)Requires the ballot pamphlet to contain a section, prepared by the LA, located near the front of the pamphlet, that provides a AB 1021 Page 3 concise summary of the general meaning and effect of "yes" and "no" votes on each state measure. COMMENTS : According to the author, "AB 1021 would require greater transparency in the fiscal analysis of initiatives by adding advisories to the fiscal impact statement for petitions and the ballot pamphlet if the measure does not provide adequate funding or corresponding reductions to fund implementation. The democratic process requires transparency and an honest evaluation of the cost of government. Accordingly, this bill aims to give voters a better understanding of the fiscal impact of initiatives proposed for or placed on a ballot." Since the implementation of the initiative process, there have been a number of approved measures which have required a certain portion of General Fund (GF) spending be dedicated to a specific purpose. These measures restrict the Legislature's ability to alter the relative shares of GF spending provided to program areas in any given year. For instance, Proposition 98 of 1988, provided for a minimum level of total spending (GF and local property taxes combined) on K-14 education in any given year. Proposition 98 accounts for over 40% of annual state GF spending. Proposition 49 of 2002, requires that the state spend a certain amount on after-school programs, which exceeded $540 million in fiscal year 2009-10. Current law already requires that the fiscal impact of a proposed measure be analyzed and included in both the circulating title and summary and in the analysis printed in the state ballot pamphlet. This bill requires additional information to be included and for measures that would exceed $1 million in cost for the creation of a new program, to specify that the fiscal impacts of the proposed measure would have an impact on current programs, if passed. Given that fiscal impacts are already being discussed in the analysis of proposed measures, it is unclear whether the additional information required by this bill would be redundant. However, given the impacts that approved initiatives have had on the state's GF, it may be beneficial to clarify to the electorate, prior to voting, that the costs of proposed measures will have an impact on the continuation of current programs. Analysis Prepared by : Maria Garcia / E. & R. / (916) 319-2094FN: 0000711 AB 1021 Page 4