A resolution to propose to the people of the State of California an amendment to the Constitution of the State, by repealing and adding Article XIIIB thereof, and by amending Section 8.5 of Article XVI thereof, relating to expenditure limits.

Existing provisions of the California Constitution prohibit the annual appropriations subject to limitation, as defined, of any entity of state or local government from exceeding the entity's adjusted annual appropriations limit. These provisions also require 50% of the excess revenues received by the state in a fiscal year and the fiscal year immediately following it to be transferred and allocated, from a fund established for that purpose, to the State School Fund, and the remaining 50% of those excess revenues to be returned by a revision of tax rates or fee schedules within the next 2 subsequent fiscal years. This measure would repeal those provisions, and instead would prohibit total expenditures of state General Fund and special fund revenues from annually increasing by more than the annual percentage increase in the cost of living, multiplied by the annual percentage increase in state population. The measure would require excess General Fund revenues to be allocated in prescribed amounts first to a reserve account, and then, to the extent excess revenues remain, to the State School Fund and to personal income taxpayers.