Title
Public Hearing to Establish the Proposition 4 (Appropriations) Limit for Fiscal Year (FY) 2016-17 and Adoption of Resolution Establishing the Appropriations Limit for FY 2016-17. (Finance 2410)
Body
To: Honorable Mayor and Members of the City Council
From: Jill Keimach, City Manager
Re: Public Hearing to Establish the Proposition 4 (Appropriations) Limit for Fiscal Year (FY) 2016-17 and Adopt of Resolution Establishing the Appropriations Limit for FY 2016-17
BACKGROUND
In November 1979, the voters of the State of California approved Proposition 4. The proposition created Article XIIIB of the State Constitution placing limits on the amount of revenue that can be spent by state and local governments in California. Each government entity is required to set its Appropriation Limit each fiscal year with FY 1978-79 serving as the base year limit. Limit adjustments occur each subsequent year using a combination of increases in population and in per capita personal income (CPI), whichever is less.
Proposition 4 and its implementing legislation were modified by Proposition 111. Beginning with the Fiscal Year 1990-91 Appropriation Limit, the annual adjustment factors changed. On an annual basis, the government entity can select whichever is greater: the CPI or assessed valuation due to non-residential construction within the City. To determine the population factor, the entity can select the greater of population growth either within the City or County.
Proceeds of taxes in excess of the limit, with limited exceptions, must be returned to the taxpayers within two years by refund or reduction in tax rates, unless an extension of the limit is approved by majority popular vote.
DISCUSSION
A resolution must be adopted to approve an annual appropriations limit each fiscal year. This action is required under Section 7910 of the Government Code and by Article XIIIB of the California Constitution (commonly referred to as the "Gann ...
Click here for full text