BILL ANALYSIS �
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | SCA 6|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
THIRD READING
Bill No: SCA 6
Author: DeSaulnier (D) and Wolk (D)
Amended: As introduced
Vote: 27
SENATE ELECTIONS & CONSTITUTIONAL AMEND. COMM. : 3-1, 3/19/13
AYES: Correa, Hancock, Yee
NOES: Anderson
NO VOTE RECORDED: Padilla
SENATE APPROPRIATIONS COMMITTEE : 5-2, 5/23/13
AYES: De Le�n, Hill, Lara, Padilla, Steinberg
NOES: Walters, Gaines
SUBJECT : Initiative measures: funding source
SOURCE : Author
DIGEST : This bill, if approved by the voters, prohibits
future initiatives from being placed on the ballot if the
measure results in a net increase in state or local government
costs as determined by the Legislative Analyst Office (LAO) and
the Director of the Department of Finance (DOF).
ANALYSIS :
Existing law:
1. Requires the Attorney General (AG), upon receipt of a draft
of a petition for a proposed initiative measure, to draft a
CONTINUED
SCA 6
Page
2
title and summary of the proposed measure.
2. Provides that if the AG determines that a proposed measure
will affect state or local revenues or expenditures, he/she
must include in the title and summary either the estimate of
the amount of change in state or local revenues or costs, or
an opinion as to whether or not a substantial net change in
state or local finances will result if the proposed
initiative is adopted.
3. Requires the DOF and the Joint Legislative Budget Committee
(JLBC) to jointly prepare the fiscal estimate that is
included in the title and summary.
4. Allows an initiative measure to propose changes to law that
will result in a net increase in state government or local
government costs.
This bill provides that when an initiative measure results in a
net increase in state or local government costs, as jointly
determined by the LAO and Director of DOF, it may not be
submitted to the electors or have any effect unless and until
the LAO 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. This
requirement does not apply to costs attributable to the
issuance, sale, or repayment of bonds authorized by the
initiative measure.
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 LAO usually always takes the lead and begins the
process of investigative research, including how programs are
affected and how possible passage and implementation impacts 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.
CONTINUED
SCA 6
Page
3
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% of the state's budget. Proposition
49 of 2002 required that the state spend a specified amount on
after-school programs.
Other States . According to the National Conference of State
Legislatures, as of 2006 the following eleven states have
restrictions on the use of the initiative with regard to
appropriations and funding mechanisms.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
One time ballot printing/mailing costs of approximately
$198,000 - $264,000 depending on the number of pages and based
on an estimated cost per page of $66,000. (General)
Unknown potentially significant future savings in state and
local government costs.
SUPPORT : (Verified 5/23/13)
Rural County Representatives of California
OPPOSITION : (Verified 5/23/13)
California Taxpayers Association
Howard Jarvis Taxpayers Association
ARGUMENTS IN SUPPORT : According to the author's office, in
1911, Californians created the state initiative process by
CONTINUED
SCA 6
Page
4
approving a constitutional amendment placed on the ballot by
Progressives in the State Legislature. Since 1911, Californians
- by way of the initiative process - have dramatically changed
the landscape of their state government by passing various
ballot measures.
Budget experts say that fiscal measures that pass on the ballot
constrain the hands of the Legislature, especially during
difficult budget times. Over the last 30 years, California
voters have approved measures to not only dedicate tax revenues
in certain ways, they've also approved initiatives that lock in
state spending - which restricts the Legislature from altering
significant portions of General Fund spending.
This bill allows voters to continue to approve measures that
cost state and local dollars to implement, but it requires such
measures to identify the dollars needed for implementation.
A number of states limit or forbid initiatives that appropriate
money for any purpose. However, Arizona, Maine, Mississippi,
Missouri and Nevada allow for new programs that cost money, but
only if the initiative creates and provides for the added
resources.
In recent years, propositions were approved that have
appropriated a certain portion of General Fund spending to be
dedicated to a specific purpose. These measures restrict the
Legislature's ability to adjust the General Fund spending in any
given year, in order to carry out the purpose of the measure.
This bill is identical to SCA 4 (DeSaulnier) of 2011 and SCA 14
(Ducheny) of 2009 both of which were approved by this committee
but failed passage on the Senate floor.
ARGUMENTS IN OPPOSITION : According to the California
Taxpayers Association, "SCA 6's "pay-as-you-go" provisions are
biased: Initiatives must identify new revenue to support new
expenditures, while ballot measures proposed by the Legislature
are not held to the same standard. A problem with the
"pay-as-you-go" approach is that proponents of an initiative
would not have an official fiscal analysis of their initiative
until after it enters circulation. If the initiative failed to
meet the "pay-as-you-go" requirements, it likely would be too
late to submit another version for a title and summary to the
CONTINUED
SCA 6
Page
5
attorney general, collect signatures, and then submit signatures
to election officials for certification - a lengthy process that
requires months of planning. If SCA 6 had been in effect nearly
25 years ago, it would have removed from the ballot Proposition
98, "Jessica's Law", and "Three Strikes Law," among others.
"Although requiring a mechanism to pay for new programs is
appealing, giving power to either a legislative appointee (the
legislative analyst) and/or gubernatorial appointee (the
director of finance) to remove an initiative from the ballot
sets a dangerous precedent. It has the potential to disregard
important policy measures for manipulative political purposes.
The initiative process is intended to be a resource for the
people - a means of checks and balances when the legislative
process falls short. Further, if a measure
CONTINUED
SCA 6
Page
6
is removed from the ballot, an initiative's proponents would be
given the nearly impossible task of refuting empirical evidence
and statistical modeling provided by state officials."
RM:d 2/19/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
CONTINUED