Gann Limit Blast from the Past Has Become Brown’s Budget Thorn in the Side

Ancient scrolls tell us there was once an era when Californians rose up against the heavy hand of taxation. In the now-distant year of 1978 voters approved Proposition 13 to limit the government’s reach in property taxes. The final tally was a 65-35 message from voters which clearly told politicians “hands off.” Less than 18 months later, Proposition 4, known as the Gann Limit, was passed by an even bigger margin — nearly 75-25. Once again, and for the second time during Jerry Brown’s first terms as governor, the voters told politicians to keep their paws out of taxpayers’ wallets.

Less well-known than Prop 13, the Gann Limit amended the Constitution by placing appropriations limits on Sacramento and most local governments.

“The fundamental purpose of the Gann Limit is to keep real (inflation adjusted) per person government spending under 1978‑79 levels,” according to the Legislative Analyst’s Office.

Of course, the politicians have spent the four decades since trying to undermine the restrictions placed on them by the voters. Typically, our elected officials try to skirt the limits by employing creative and flexible definitions to avoid what the LAO characterizes as “a complex series of calculations . . . performed each year to compare appropriations to the limit.”

The LAO believes the administration is trying to overspend by about $6 billion on the next budget, and recommends “the Legislature direct the administration to revise its approach going forward to be consistent with the limit.”

The Brown administration has tried to get around the Gann Limit before. A year ago, an LAO representative testified that the governor’s office was trying to spend $2 billion more than was allowed under the amendment. (Earlier reports said the governor’s office wanted to exclude as much as $22 billion in spending from the Gann Limit.) The Senate and Assembly Budget Committee Vice-Chairs – Republican Sen. Jim Nielsen and GOP Assemblyman Jay Obernolte – issued a joint letter last year critical of the administration’s “decision to change the accepted methodology for the Gann limit” and called the attempt “a budget gimmick.”

Pressure from Sacramento Republicans eventually forced the Brown administration to reverse its course and return to the previously accepted calculations. Jon Coupal, president of the Howard Jarvis Taxpayers Association, wrote in the Orange County Register that the LAO’s scolding shocked the members of the political class because they “thought they had eliminated the hated Gann Limit once and for all.” Coupal says that it is “back from past to needle big-spenders.” Ironically, the same Jerry Brown who is trying to flaunt the Gann Limit now supported the measure back in 1979. The LAO’s most recent rebuke of the governor’s budget plans should give it even greater renewed strength, a development that overly burdened taxpayers need.

Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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