California Constitution Article XIII B - Government Spending Limitation [Sections 1 - 15]
California Constitution – Article XIII B: Government Spending Limitation [Sections 1–15]
📘 Overview:
Article XIII B of the California Constitution, enacted by voters in 1979 through Proposition 4 (the “Gann Limit”), limits the amount of tax revenues that California state and local governments may spend each year. Its primary purpose is to control government growth by capping appropriations from tax proceeds, with provisions to return excess revenues to taxpayers under certain conditions.
🔑 Key Provisions (Sections 1–15):
Section 1 – Appropriations Limits
Sets the framework that state and local governments may not appropriate (spend) revenues exceeding their appropriation limit, which is adjusted annually.
Section 2 – Definitions
Defines key terms:
“Appropriations subject to limitation” – generally tax revenues, excluding certain items (like federal funds, court-ordered spending).
“Proceeds of taxes” – includes tax revenues and certain fees.
“Appropriations limit” – the spending ceiling, calculated based on prior year limits adjusted for inflation and population growth.
Section 3 – Exclusions
Lists appropriations not subject to the limit, such as:
Debt service,
Federal funds,
Court-mandated payments,
Certain emergency expenditures.
Section 4 – Emergency Appropriations
Allows the state or local governments to exceed the limit in cases of emergency, but only with a two-thirds vote of the Legislature.
Section 5 – Revenue Redistribution
Excess revenues above the spending limit for two consecutive years must be refunded to taxpayers.
Section 6 – Local Government Limits
Each local government (e.g., city, county, school district) must set and manage its own spending limit.
Section 7 – School Districts and Education
Specifies how limits apply to school districts and community college districts.
Section 8 – State Mandates on Local Governments
If the state mandates a new program on local governments, it must provide funding for it.
Section 9 – Retirement Systems
Limits use of public funds to cover increases in retirement benefits unless approved by voters.
Section 10 – Transparency and Public Involvement
Governments must adopt spending limits at open public meetings.
Section 11 – Adjustments
Provides formulas to adjust the spending limits annually based on:
Cost of living (CPI),
Population changes,
School enrollment.
Section 12 – Special Funds
Spending from certain special-purpose funds (not general taxes) may be excluded from the limits.
Section 13 – Judicial Enforcement
Allows lawsuits to enforce Article XIII B.
Section 14 – Severability
If any part is invalidated, the rest of the article remains in effect.
Section 15 – Implementation by Statute
Legislature may pass laws to implement this article, so long as they don’t undermine its intent.
📊 Purpose and Impact:
Ensures fiscal restraint in state and local budgets.
Reflects voter skepticism of unchecked government growth (especially post-Prop 13).
Influences budget negotiations and tax refund decisions, especially in surplus years.
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