AgdaPkt 2004-08-23 - Laserfiche WebLink

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:¡iA~B Q: What happens in the event of a fiscal emergency? Will this measure tie the legislature's hands in passing a budget or create more problems during the next state fiscal crisis? A: Prop 1 A was intentionally written to allow flexibilitv and provide the Governor and legislature with options - but only in the event of a "significant state fiscal hardship". Under the provisions of Prop 1A, beginning in 2008-09, if the Governor proclaims a "significant state fiscal hardship", the Legislature may suspend the constitutional protection and may borrow local property taxes only under following conditions: · A separate urgency bill must be passed by a 2/3 vote of Legislature; · The Legislature must pass a law to fully repay the loan with interest within 3 fiscal years; · New loans are prohibited until prior loans have been repaid; · No more than two loans may occur during any ten-year period; · The loan amount is capped at 8% of local government property tax amount (equivalent of approximately $1.3 billion in today's property tax dollars); While Prop 1 A contains flexibility in a state fiscal hardship, it also prevents the state from using local government funds any time legislators choose. It also requires that future state reductions be repaid in full. Q: Will Prop 1A erode state funding for schools or education? A: No. Prop 1 A was carefully written to ensure that it does not reduce funding for education or schools by one dime. Under Proposition 98, schools are guaranteed a level of funding from the state - and Prop 1A does not change that. Q: Does Prop 1 A give more protection to local government than schools currently receive? A: NO. Under Proposition 98, schools are guaranteed a minimum amount of funding out of the state general fund and Proposition 1A does not impact those protections at all. Further, comparing the funding guarantees for schools with Prop 1 A is an apples-to-oranges protection. Proposition 98 guarantees schools a specific amount of State General fund revenues. Proposition 1A simply protects revenues that are LOCAL GOVERNMENT revenues, but that the state has been taking for more than 12 years. Q: What about other state programs? Will this measure reduce funding for state programs like roads and prisons? A: Prop 1 A simply prevents the state from raiding local revenues. The state still has flexibility over its own revenues. Q: Doesn't Prop 1Ajust add to the state's fiscal woes by initiating further "ballot-box- budgeting" that puts restrictions on how it can spend its revenues? A: No. The initiative does not tell the state how to spend the state's own revenues (as some propositions have done). What it does is prevent the state from raiding local government revenues for state purposes. This will mean that, for the first time in many years, local communities will be have the certainty and predictability they need to plan and provide for current and future service needs.