BILL ANALYSIS �
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THIRD READING
Bill No: AB 65
Author: Gatto (D)
Amended: 8/23/11 in Senate
Vote: 21
SENATE ELECTIONS & CONST. AMEND. COMMITTEE : 4-1, 7/5/11
AYES: Correa, La Malfa, De Le�n, Lieu
NOES: Gaines
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : Not relevant
SUBJECT : Elections: statewide ballot pamphlet
SOURCE : Author
DIGEST : This bill, except as specified, based on a
determination in the fiscal analysis by the Department of
Finance and the Joint Legislative Budget Committee that a
measure would provide new revenues for new or existing
programs, requires that specified language which advises
that the revenue generated by the measure will be forever
dedicated for the purposes specified in the measure unless
the measure is changed by a future initiative, be provided
to the Attorney General and included in the circulatory
title and summary.
ANALYSIS : Existing law requires the proponents of a
proposed initiative measure to submit the text of the
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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.
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This bill requires 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, a
paragraph shall be provided to the AG which shall be
included in the circulating title and summary for
appearance on the petition. The following disclosure is
provided pursuant to AB 65 of the 2011-12 Regular Session:
"Unless changed by a future initiative, the taxpayer
dollars generated by this initiative will be forever
dedicated to the purposes listed in this initiative, and
cannot be spent by the state for any other purpose."
This bill also requires that the aforementioned paragraph
must be included in the analysis of each initiative 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 or if the initiative measure
allows the Legislature to reallocate the revenues, 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
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
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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 two-thirds vote to pass.
Maine - Expenditures in an amount in excess of available
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.
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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
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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
According to the author, this bill seeks to help create
this better informed citizenry by giving voters more
information when considering initiatives on the ballot.
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.
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 is not, 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 the
budget process, helping explain why certain funds cannot
easily be shifted to help deal with budget deficits.
Related Legislation
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AB 1021 (Gordon) 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. (On Senate Third Reading
File)
SCA 4 (DeSaulnier) prohibits 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 DOF jointly determine that the
initiative measure provides for additional revenues in an
amount that meets or exceeds the net increase in costs.
(On Senate Third Reading File)
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
DLW:mw 8/24/11 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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