SACRAMENTO\u00a0\u2014\u00a0Gov. Gavin Newsom and Democratic leaders of the California Legislature plan to approve a proposed constitutional amendment this week that would ask voters to give them more flexibility over state spending and allow them to save money that could otherwise go back to taxpayers. <\/p>\n
The proposal seeks to exempt deposits into state savings accounts from a spending limit that voters adopted through a series of ballot measures dating back to the late 1970s and to increase the share of tax revenue that can be put into the rainy day fund.<\/p>\n
\u201cPutting money aside to protect ourselves from future uncertainties isn\u2019t just good government; it\u2019s common sense,\u201d Newsom said in a statement. \u201cCalifornia is strong and resilient, but we\u2019re not immune to economic headwinds. At a time when our essential services are under pressure, we have a responsibility to safeguard the programs and investments that Californians rely on.\u201d <\/p>\n
Assembly Constitutional Amendment 20, which Democrats are calling the \u201cSave for California\u2019s Future Act,\u201d could receive push back from taxpayer advocates. <\/p>\n
Under an existing state appropriations restraint, also known as the Gann limit, lawmakers cannot spend more than an amount determined by a formula that takes into consideration annual tax proceeds and changes to the population and cost of living. Tax revenue above the limit must be divided between schools and refunds to taxpayers. <\/p>\n
With few exceptions, the limit applies to most appropriations of tax revenue, including money that lawmakers tuck away into the rainy day fund and other reserves. California voters have also capped the amount of money lawmakers can set aside in the rainy day fund to 10% of general fund proceeds in a given year. <\/p>\n
Since taking office, Newsom has argued that it doesn\u2019t make sense for savings to count as spending under state law. <\/p>\n
State budget revenue is subject to dramatic swings from year to year based on stock market activity. The law, Newsom has said, prevents the state from saving more money in good years to stave off cuts to programs in bad years. <\/p>\n
The proposed changes would exempt deposits into the rainy day fund and a short term reserve, called the \u201cProjected Surplus Temporary Holding Account,\u201d from the state appropriations limit. The cap on the rainy day fund would grow from 10% of general fund tax revenue to 20%. <\/p>\n
\u201cCalifornians live by a simple, bipartisan truth: set money aside when times are good so you\u2019re ready when they\u2019re not,\u201d Assembly Speaker Robert Rivas (D-Hollister) said in a statement. \u201cThe Save For California\u2019s Future Act is what responsible leadership looks like \u2014 and future taxpayers will thank us for it.\u201d<\/p>\n
The measure could incentivize Democrats to save more money because funds tucked away in the rainy day fund would no longer be considered expenditures counted toward the spending limit. By allowing lawmakers to set aside more money that is not subjected to state spending limits, it could also allow them to hold onto money that would be returned to taxpayers under current law. <\/p>\n
The measure is slated for a vote Thursday. If approved by two-thirds of lawmakers, voters will consider the proposal on the November ballot. <\/p>\n","protected":false},"excerpt":{"rendered":"SACRAMENTO\u00a0\u2014\u00a0Gov. Gavin Newsom and Democratic leaders of the California Legislature plan to approve a proposed constitutional amendment this…\n","protected":false},"author":2,"featured_media":81951,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[4480,7,9,1843,8,4970,1751,150732,150730,7834,4263,150731,3290,150729,61186,23415,9577,72],"class_list":["post-372082","post","type-post","status-publish","format-standard","has-post-thumbnail","category-california","tag-ballot-measure","tag-california","tag-california-headlines","tag-california-legislature","tag-california-news","tag-california-voter","tag-democrats","tag-future-act","tag-gann-limit","tag-lawmaker","tag-money","tag-more-spending-flexibility","tag-newsom","tag-rainy-day-fund","tag-state-spending","tag-tax-revenue","tag-taxpayer","tag-year"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/372082","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=372082"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/372082\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/81951"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=372082"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=372082"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=372082"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}