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February 1, 1982 - (136 pages, 8 MB) For the second year in a row, the Legislature faces a budget that does not contain sufficient funds to maintain the existing levels of service. In terms of real purchasing power, the Governor's Budget for 1982-83 is 3.5 percent lower than the budget for the current year. The General Fund portion of the Governor's Budget will be in balance only if several critical assumptions underlying the budget are borne out. These assumptions include: the state's economy will improve by rnid-1982; the Legislature will approve total revenue package of nearly $1 billion; at the June 1982 primary election, the voters will approve the bond measure for state prison construction, .and disapprove initiatives relating to income tax indexing and inheritance and gift taxes. If these and other assumptions are not borne out, the General Fund will end the year with a deficit, even if there is no carry-over deficit remaining. Here, we provide a perspective on the state's current fiscal situation, including options for addressing the deficit in the General Fund Budget for 1982-83, provide a perspective on the budget issues that the Legislature faces in 1983-84, and discuss major issues that have been identified in our review of the state's current fiscal condition and the Governor's Budget for 1983-84.
December 1, 1979 -
On November 6, 1979, California voters overwhelmingly approved Proposition 4, the "Spirit of 13" Initiative sponsored by Paul Gann. The proposition, which places Article XIIIB in the California Constitution, limits the growth in appropriations of both state and local governments to changes in the cost of living and population in order to control the spending levels established by California governments. Proposition 4 also attempts both to clarify the fiscal roles played by the various branches (legislative, judicial and executive) and levels (federal, state and local) of government, and to insure that any surplus funds are promptly returned to the people.
Proposition 4 is a sweeping measure which will dramatically affect both the state government and the vast majority of California's 6,600 local governments. Precisely how it will affect these governments, though, is not clear because the measure raises many questions and problems regarding how it is to be interpreted.
January 1, 1979 - Chapter 1169, Statutes of 1973 (58 911), modifies, for purposes of property taxation, the allocation formula used to assess aircraft owned by certificated air .carriers and scheduled air taxis. This act revises the aircraft assessment formula to exclude (1) all time prior to an aircraft's first revenue flight and (2) ground time in excess of 12 consecutive hours. The provisions of Chapter 1169 are effective for the 1974-75 through 1979-80 fiscal years, after which time the specified exclusions from the formula become inoperative. Chapter 1169 also requires the Legislative Analyst to report to the Legislature on the economic and revenue effects of this exemption. This report discusses (1) provisions of Chapter 1169, (2) background information on the aircraft maintenance industry, (3) state reimbursements under Chapter 1169, and (4) economic impacts of the exemption.