This will require government to have a balanced budget every 2 years. 

Summary
What this Proposition will do is ...
1. Establish a two-year state budget cycle
2. Prohibit the California State Legislature from creating expenditures of more than $25 million unless offsetting       revenues or spending cuts are identified.
3. Permit the Governor of California to cut the budget unilaterally during declared fiscal emergencies if the state Legislature fails to act.
4. Require performance reviews of all state programs
5. Require performance goals in State and local budgets
6. Require publication of bills at least three days prior to a vote by the State Senate or Assembly

 

Controversy
  •       This will allow the Governor limited ability to reduce state spending- meaning that he can cut funding to projects that are financed with the general fund that are not Constitutionally protected.
  •          It is said that if this passes the changes could be challenged and taken to court.
  •         The argument against the reform says they are not against the idea but they are opposed to the wording
Fiscal Impact
This will reduce the general fund $200 million annualy and alocate it to local government. It will make the State government more accountable, responsible, and efficient; thus potentialy offseting its cost. There is no accurate prediction on what effect this will have but it could be substantial.
Questions -
  1. Do you want to Try a new system that could make our goverment more efficient and effective?

YES vote- The state would adopt this new policy

No vote- The state would not adopt the new policy
Notes-
  • This doesn’t ‘cost’ the State $200 million. It moves the money away from the State, and puts it into the hands of local governments upon receipt, by the State, of an Action Plan submitted by the local government. Locally elected officials spend tax money how they see fit for their communities upon local voter approval.
  • Spending increases cannot be enacted without a corresponding increase in revenue.  Revenue (tax) decreases must accompany spending decreases. In other words, they’ll have to show how they’re paying for these things.
  • Section 12(k) is interesting: No compensation for lawmakers that fail to pass a budget on time. If they do eventually get around to it, they still forfeit all their pay for the days that the budget was late. No more retroactive pay for what should have been done on time. Really-would your Boss keep you around (let alone pay you!) if you turned in your work late every time?
  • Article IV, Section 10(e): The Governor now has line item veto powers on spending bills.
  • Interesting possibilities:
    • With more time available to work on a budget, what will our lawmakers do? Will they spend even more time fund-raising, or get a head start?
    • California’s budget is a guessing game. CA gets most of its money from income taxes (personal, business, corporate). CA also has one of the most cyclical economies in the nation. So, we tend to climb higher and fall harder than the other States. We’ll be passing budgets encompassing 2 years worth of spending under this new law. CA could be in deeper trouble when things get bad. If things get better in the middle of a budget cycle, any surplus would (probably) go to debt reduction, as spending increases would no longer be allowed without corresponding tax increases. This proposition will either be genius, or a Pandora’s Box of trouble. 

 


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