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.