Attorney General No.


Secretary of State No.



EMERGENCY RESERVE. DEDICATION OF CERTAIN TAXES TO TRANSPORTATION. APPROPRIATION LIMIT CHANGE. CONSTITUTIONAL AMENDMENT. Requires 3 percent of total state General Fund budget be included in reserve for emergencies and economic uncertainties. Provides that net revenues derived from state sales and use taxes on motor vehicle fuels shall be used only for public streets, highways, and mass transit guideways. (Three year phase-in.) Requires 2/3 vote of Legislature or majority vote of voters before taxes on motor vehicle fuels may be raised. Reserve and fuel tax revenues excluded from appropriation limit. Prohibits Legislature from lowering local sales tax rates in effect January 1, 1987. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local governments: The sales tax and transportation-related revenue provisions of this measure would result in a net increase in the state's appropriations authority of at least $690 million in 1988-89, $630 million in 1989-90, $575 million in 1990-91, $525 million in 1991-92, and decreasing amounts annually thereafter. The provisions of this measure related to reserve funds could result in an additional increase of state appropriations authority of up to $700 million in 1988-89, $815 million in 1989-90, $865 million in 1990-91, and $915 million in 1991-92. Thus, assuming sufficient levels of revenue, the state could make additional appropriations of approximately $1.4 billion in 1991-92, when the provisions are fully phased-in. The measure would also result in revenue losses to the General Fund and revenue gains for transportation-related programs of approximately $710 million in 1991-92, after the measure is fully phased-in. To the extent that state revenues are sufficient, the increased appropriations authority mentioned above could partially or fully offset the General Fund revenue losses resulting from the transportation-related provisions of this measure. Finally, the measure could have the effect of reducing the amount of surplus state revenues which would otherwise have to be returned to taxpayers in future years.


Paul Gann, 2512 Los Feliz, Carmichael, California 95608 (916) 482-6175; Joel Fox, 6600 Balcom Avenue, Reseda, California 91335 (Attorney For Proponents); Steven G. Churchwell Nielsen, Merksamer, Hodgson, Parrinello & Mueller, 1030 Fifteenth Street, Suite 250, Sacramento, California 95814 (916) 446-6752



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