Date:      December 1, 2003

            To:      Members of the California Legislature

       From:      Elizabeth G. Hill, Legislative Analyst

  Subject:     Comments on the Administration’s Spending Limit Proposal


During the November 25, 2003 hearings of the Assembly Budget and Senate Budget and Fiscal Review Committees, our office was asked for comments on the administration’s spending limit proposal. This memo (with attachment) responds to those requests.

Please feel free to contact me with any questions at 445-4656.



The Administration’s Spending Limit and
Budgetary Reserve Proposal


On November 24, 2003, the administration released a draft of its expenditure limit and budgetary reserve fund proposal. In order to assist the Legislature in reviewing the proposal, we have prepared the following initial comments regarding its provisions and key issues associated with it.

Key Provisions of the Measure

Scope and Coverage

General Fund Spending Cap

Budget Stabilization Fund

Gubernatorial Powers

Proposition 98 Interactions

The proposed spending cap would have the following three interactions with Proposition 98:

Effects on Special Funds

Legislative Issues and Considerations

Are the New Gubernatorial and Administrative Powers Excessive?

Is the Base Spending Amount the Right One?

Other Issues

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