BILL ANALYSIS �
SENATE COMMITTEE ON ELECTIONS
AND CONSTITUTIONAL AMENDMENTS
Senator Lou Correa, Chair
BILL NO: AB 2220 HEARING DATE: 6/19/12
AUTHOR: GATTO ANALYSIS BY: D. CHESIN
AMENDED: AS INTRODUCED
FISCAL: YES
SUBJECT
Statewide ballot pamphlet: analyses of initiatives:
statement
DESCRIPTION
Existing law requires the Legislative Analyst to prepare an
impartial analysis of each qualified state initiative
measure to appear in the statewide ballot pamphlet. The
analysis must include a statement regarding whether the
measure would increase or decrease any revenue or cost to
state or local government.
Existing law also requires the Legislative Analyst to
prepare for inclusion in the statewide ballot pamphlet a
summary statement regarding the general meaning and effect
of "yes" and "no" votes on each state measure.
This bill requires that the following paragraph be included
in the summary statement prepared by the Legislative
Analyst for a proposed initiative measure that provides for
new revenues to fund new or existing programs:
"Unless changed by a future measure approved by
the voters, this initiative would forever
dedicate the revenue it generates to programs
identified in the initiative by its backers,
and these revenues would not be available to
meet other responsibilities of the state not
identified in the initiative."
This bill also requires that the paragraph described above
shall not be printed in the summary statement for any
initiative measure that provides that the new revenues are
to be deposited without restriction into the state General
Fund commencing at a future date after its enactment or if
the initiative measure allows the Legislature to reallocate
the increase in revenues.
BACKGROUND
Initiative Spending . Since the implementation of the
initiative process in 1911, there have been a number of
approved measures that have required a certain portion of
General Fund spending to 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. Proposition
98 accounts for over 40% of annual state General Fund
spending.
Proposition 49 of 2002, requires that the state spend a
certain amount on after-school programs, which exceeded
$540 million in Fiscal Year 2010-11. This bill is intended
to inform voters of initiative measures that generate
revenue and earmark that revenue for a specific purpose.
Other States . Of the 24 states with an initiative process,
the way in which they regulate the fiscal impact of
proposed measures differ. Some states freely allow the
electorate to propose measures without regard to cost,
while other states impose various restrictions. According
to the National Conference of State Legislatures (NCSL), as
of 2006, the following 11 states have restrictions on the
use of the initiative with regards to appropriations and
funding mechanisms:
Alaska: No dedication of revenue or making or repealing of
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
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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 requires 2/3rds 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.
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
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appropriations.
NCSL further comments that "initiative measures that
mandate 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 2220 would require that
voters receive more information on the impact of
specific ballot initiatives. The structural budget
deficit has resulted in significant pressure on vital
public services. The size of the structural deficit has
been impacted, in part, by voter-approved initiatives
which both expend state resources and which raise
revenues and commit them to specific programs.
This measure would not impact the public's ability to
qualify or approve an initiative which raises revenue
and commits it to specific programs. It would simply
require that the Legislative Analyst's Office provide
information about the initiative's commitment of
resources to a specific purpose.
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
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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. This simple disclosure would help clarify
to voters, without comment on the merits of the
initiative itself, the disposition of revenue streams
created by an initiative without provisions which allow
a recommitment to other priorities during times when
priorities may change.
2. Previous Legislation . AB 65 (Gatto) of 2011, which is
similar to this bill, was vetoed by Governor Brown. In
his veto message, the Governor wrote, "I am sympathetic
to the author's concerns that voters should understand
more clearly the consequences of initiatives that
dedicate revenue to a specific purpose. But the rote
disclaimer mandated by this bill won't provide voters
greater clarity."
AB 1021 (Gordon and Feuer) of 2011, would have required
additional information to be included in petitions and
the ballot pamphlet for initiatives that result in costs
over $1million, but do not provide additional funding.
AB 1021 was also vetoed by Governor Brown. In his
veto message, the Governor wrote, "the additional
disclosure required by this bill will add words, but not
greater understanding about the financial impact of a
voter initiative."
PRIOR ACTION
Assembly Elections and Redistricting Committee: 4-2
Assembly Appropriations Committee: 12-5
Assembly Floor: 48-25
POSITIONS
Sponsor: Author
Support: None received
Oppose: Department of Finance
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