Title
Staff Report Establishing the City's Appropriation Limit for Fiscal Year 2016-17
Staffreport
SUMMARY AND RECOMMENDATIONS
Staff recommends City Council approval of a resolution establishing the City's appropriation limit for fiscal year 2016-17. Staff has completed the calculations required for determining the City's appropriation limit for 2016-17, which is $203,693,435. Budget appropriations that are subject to the 2016-17 limitation total $95,593,423 which is $108,100,012 below the limit.
BACKGROUND
On November 6, 1979, California voters passed Proposition 4. Statutes clarifying certain provisions of the proposition are now codified in article XIIIB of the California Constitution. This Article is commonly known as the "Gann Initiative." The Initiative established constitutional spending limits allowable for California governmental agencies based on the Consumer Price Index and population growth. Concurrent with Proposition 4, the Revenue and Taxation Code, Section 7910, requires each local governmental unit to establish its appropriations limit by the beginning of each fiscal year.
Due to Gann's constraint on the ability of State and local governments to respond effectively to the demands of rapid growth in California, a legislative-business-labor coalition drafted and supported Proposition 111, which was adopted June 5, 1990. Proposition 111 makes crucial adjustments to the Gann Initiative, by allowing greater flexibility to operate in a growing economy, while retaining its purpose in placing a limit on government spending. The following are the changes Proposition 111 made to the Gann Initiative.
Prior law required spending limits to be tied to the Consumer Price Index or California Per Capita Personal Income growth factor, whichever was lower. The new provisions allow an agency to select the California Per Capita Personal Income growth factor or the Non-residential Property Assessed Valuation growth factor, whichever is h...
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