School Funding. State Spending. Initiative Constitutional Amendment.

Attorney General No.

SA2005RF0067,Amdt. #1-NS

Secretary of State No.



Changes state minimum school funding requirements (Proposition 98), permitting suspension of minimum funding, but terminating repayment requirement, and eliminating authority to reduce funding when state revenues decrease. Excludes above-minimum appropriations from schools' funding base. Limits state spending to prior year total plus revenue growth. Shifts excess revenues from schools/tax relief to budget reserve, specified construction, debt repayment. Requires Governor to reduce state appropriations, under specified circumstances, including employee compensation, state contracts. Continues prior year appropriations if new state budget delayed. Prohibits state special funds borrowing. Requires payment of local government mandates. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local governments: Spending limit could constrain state expenditures over time. Other provisions would have major impacts on state budget decision making, which could lead to varying outcomes regarding the level of state spending and on the composition of that spending among education, transportation, and other state programs. Provisions allowing Governor to reduce appropriations could result in lower state spending in certain years when the state was facing unresolved budget shortfalls.


William Hauck and Allan Zaremberg



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