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File #: 2022-2097   
Type: Joint Agenda Item
Body: City Council
On agenda: 6/21/2022
Title: Public Hearing to Establish the Proposition 4 (Appropriations) Limit for Fiscal Year 2022-22; and Adoption of Resolution Establishing the Appropriations Limit for Fiscal Year 2022-23. [City Council] (Finance 10024054)
Attachments: 1. Exhibit 1 - Appropriations Limit Calculations, 2. Resolution
Title
Public Hearing to Establish the Proposition 4 (Appropriations) Limit for Fiscal Year 2022-22; and
Adoption of Resolution Establishing the Appropriations Limit for Fiscal Year 2022-23. [City Council] (Finance 10024054)


Body
To: Honorable Mayor and Members of the City Council

EXECUTIVE SUMMARY

The State of California Constitution requires each government entity to set an Appropriations Limit, a limit on the amount of tax proceeds that can be appropriated by state and local governments, each fiscal year. The City Council must adopt an Appropriations Limit resolution using available annual adjustment factors as stated in Proposition 111.

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 (Appropriations Limit) and is also known as the Gann Limitations. Each government entity is required to set its Appropriations Limit each fiscal year with Fiscal Year (FY) 1978-79 serving as the base year limit. The Appropriations Limit sets a cap on the amount of proceeds that can be received by the City of Alameda (City) from certain types of taxes. Appropriations Limit adjustments occur each subsequent year using a combination of increases in population and cost of living, whichever is less.

Proposition 4 and its implementing legislation were modified by Proposition 111, which changed the annual adjustment factors beginning with the FY 1990-91 Appropriation Limit. Hereafter, on an annual basis, the government entity can select whichever is greater: the cost of living change 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 Alameda County (County).

Proceeds of taxes in excess of the limit, with limited exceptions, mus...

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