HomeMy WebLinkAboutAgenda Statement 1981/06/02 Item 5, 5a
COUNCIL AGENDA STATEMENT
ITEM TITLE:
Item ,8, Sa. s: S' 4./
Public Hearing - Establishing at') Appropriations Meeting Date S 26-81 t,-.:l-S'I
~imit for Fiscal- Years Ending June 30, 1981 and June 30, 1982
Resol ution /O,!; Adopting an Appropriations Limit for Fiscal Years
Ending June 30, 1981 and June 30, 1982
SUBMITTED BY: Director of Finance
G~
(4/5ths Vote: Yes___ No~)
SB 1352 (Marks), Chapter 1205, 1980 Statutes, effective January 1, 1981,
adds Revenue and Taxation Code Section 7910 which requires each local
government to establish its Gann (Proposition 4) appropriations limit by
resolution each year at the regularly scheduled meeting or a noticed special
meeting. Therefore, it is my
RECOMMENDATION:
That the City Council adopt a resolution establishing appropriation limits
for the 1980-81 and the 1981-82 fiscal years pursuant to Proposition 4.
BOARD AND COMMISSION RECOMMENDATION: Not Applicable
DISCUSSION:
The Gann Initiative or Proposition 4, was passed on November 6, 1979 by the
voters of California, becoming a constitutional amendment, which limits the
" annual growth of state and local government budgets. Basically, the amend-
ment establishes fiscal 1978-79 as the base year and allows the base to
increase in future years by the percentage of growth in population and by
the increase in the Consumer Price Index or California Per Capita Personal
Income, whichever is lower.
Uniform guidelines for the implementation of Proposition 4 were developed by
the League of California Cities since they were not provided by the drafters
of the initiative. Based on the League's guidelines, we have calculated the
City's fiscal 1978-79 base year appropriations limit to be $14,726,939.
Adjusting this base using the information provided by the State Department
of Finance and the League of California Cities pursuant to Proposition 4,
the appropriations limit is calculated to be $18,766,538 for fiscal year
1980-81 and $20,675,150 for fiscal year 1981-82.
It should be noted that Proposition 4 does not limit all appropriations, but
only those that are financed from "Proceeds of Taxes". "Proceeds of Taxes"
include such revenues as property taxes, sales and use taxes, utility users
taxes, transient occupancy taxes, and State subventions. Revenues from other
sources like fees/charges and Federal grants are considered "Non-proceeds of
Taxes" and not subject to limit.
The City's appropriations subject to limit for 1980-81 are estimated to be
under the Proposition 4 limit by $6,400,000 and $8,800,000 for the 1981-82
fiscal year. The actual difference between the City's appropriations subject
to limit and the amount permitted by Proposition 4 will depend on final ap-
propriations and actual revenues received. Since the differences are so
sizeable, however, the City should not experience any difficulty in staying
within the limit.
Form A-113 (Rev. 11/79)
/DC(7t./