California Voters to Decide on Spending Limit in November Election

June 17, 2005

Governor Arnold Schwarzenegger has succeeded in putting the “Live Within Our Means” plan on the November statewide ballot. If approved by voters, the plan would limit state spending to the average growth in state revenues in the previous three years. It would also require surplus revenues to be used to fill the state rainy day fund, repay deficit finance bonds, repay funds borrowed from transportation funds, fulfill obligations under the school finance Proposition 98, and pay for highway and school construction projects.

While this spending limit will not require surplus funds to returned to the taxpayers (as the revenue limit in Colorado does) it is still a good step to restoring fiscal sanity to California. At least part of the surplus funds will be used to pay off debt and shore up reserves, rather than accumulate more spending which will worsen a future deficit. And, best of all, if the people pass this measure they will make a very important statement about the need to place limits on the growth in government spending.

Was this page helpful to you?

No

Thank You!

The Tax Foundation works hard to provide insightful tax policy analysis. Our work depends on support from members of the public like you. Would you consider contributing to our work?

Contribute to the Tax Foundation

Related Articles