Spending Cap In Place Already (The Educrats Wrecked It And Hate Strengthening It Alert)

Los Angeles Times ^ | 11/27/03 | Jeffrey L. Rabin

[goldstategop]

Ironically, California has had a constitutional spending cap — little known and of little effect — for nearly a quarter of a century. Experience with the existing limit illustrates that capping state spending is far easier said than done.

The Gann limit, named after anti-tax crusader Paul Gann, said state spending could grow no faster than the rate of inflation and population growth.

The cap was approved by voters. But over the years, subsequent voters approved a string of new ballot measures that created holes in the limit.

Now, with Schwarzenegger's proposal, the state may come full circle, back to the concept that voters need to impose financial discipline on the political system in Sacramento. And Schwarzenegger's proposal faces some of the same criticism that eventually eroded the Gann limit: that it would harm schools....

The spending cap that Schwarzenegger proposed would force state government to live within its means by requiring that general fund expenditures not exceed general fund revenues beginning July 1, 2004.

The constitutional amendment would further limit the Legislature by diverting any revenues above the spending limit to a new "rainy day" reserve account.

Money placed in the reserve could be spent only to provide tax rebates, pay off deficit financing bonds, deal with emergencies, or supplement general fund spending when revenues drop in economic downturns.

That, however, means that schools no longer would have a fixed claim on new state revenues.

Alarmed, the education lobby is lining up against the governor's spending cap. The proposed limit would force "huge, huge cuts" in next year's budget, said Goldfinger.

"It would lock in a relatively low level of funding," for schools, he said. "This would lock us into mediocrity, a low level of mediocrity."

[goldstategop]

The educrats hated the original spending cap and would like the schools to continue to hog half the budget. As for being locked into a low level of mediocrity - its the liberal assumption more spending = improved educational quality. A proposition for which there is scant evidence. Ironically, the schools are losing money - but not because of a spending limit but simply that there's no way to give them all the money they want without leaving California unable to attend to other critical needs. The selfishness and short-sightedness of California's educrats like Paul Goldfinger has left schools even worse off than they would have been had they not pushed for Proposition 98 in the first place.

[Carry_Okie]

The selfishness and short-sightedness of California's educrats like Paul Goldfinger has left schools even worse off than they would have been had they not pushed for Proposition 98 in the first place.

Selfish? Absolutely. Short-sighted? Absolutely not. The educrats know exactly what they are doing and are delighted when the schools deteriorate. The vast bulk of them don't work in a school, but in palacial administrative facilities.

The worse it gets, the more you'll spend.

[daviddennis]

Not to beat a dead horse, but these figures are out and out embarassing.

Did you know the LAUSD spends 10.8% more than the LA County average? By that account, the LAUSD should be a great district.

Santa Monica-Malibu spends 8.2% more than the average - that is, more than 2% less than LAUSD - but they have way better results.

Worse, Las Virgines School District spends 2.9% LESS than the average. This includes Calabasas. I was there yesterday to look at a house, and I couldn't help but notice the nearby school, with happy kids and sunny smiles everywhere. The LAUSD school I visited felt like a jail.

It doesn't look to me like spending more money would make a big difference. I'll bet that if you gave the LAUSD more money, they'd take steps to make their schools more effective jails.

NONE of it would reach the classrooms.

D

Source:
http://www.losangelesalmanac.com/topics/Education/ed04n.htm

[concentric circles]

This story is a good synopsis of the devolution of the Gann
limit.

"...The Gann limit, named after anti-tax crusader Paul Gann, said state spending could grow no faster than the rate of inflation and population growth..."

"...anger at Sacramento led voters to approve the Gann limit in the fall of 1979. The anti-tax fever that had swept California a year earlier when voters approved Proposition 13 was still strong: The spending cap was overwhelmingly approved."

"...At first, the limit had little impact on the state budget because of several years of high inflation and rapid population growth, which pushed the spending cap skyward."

"During the recession of the early 1980s, revenues fell well below the spending limit. It took until the mid-1980s for state revenues to reach the spending cap."

"The Gann measure required that excess revenues above the spending limit be returned to taxpayers, which happened only once: in the 1986-87 budget year."

"... the tax rebate angered education interests who felt the windfall should have been used to improve schools. Advocates for schools drafted another ballot measure, Proposition 98, which passed with just over 50% of the vote in 1988. Proposition 98 provided that public schools and community colleges receive a share of any excess revenues."

"In periods of rapid economic growth, schools won a larger share of the state budget... Proposition 98 also required the state to make up for decreases in education spending that occur when revenues drop in times of economic difficulty."

"But the increased spending on schools came at the expense of other state programs. That angered the transportation lobby, which in 1990 sponsored yet another initiative, Proposition 111, which altered the Gann limit again to exempt gasoline taxes. Proposition 111 also recalculated how fast spending could grow. The formula, instead of using the Consumer Price Index and population to raise the spending cap, was tied to population growth and per capita personal income, which typically grows faster than inflation."

"... the stock market bubble burst in 2000, state revenues, particularly income tax receipts, have fallen dramatically."

"But spending has remained high. To "balance" the budget on paper, lawmakers and former Gov. Gray Davis relied on borrowing, accounting changes, unrealistic revenue and spending estimates, and one-time revenues."

"... during the last five years California government has spent $23 billion more than it has taken in. "State expenditures have risen by 43%," Arduin said. "Revenues have increased by 25%."