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Consent-General Government # 13.
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| Board of Supervisors Meeting |
Financial Services |
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| Subject |
| Adopt a resolution establishing the County of Yolo appropriations limit for fiscal year 2014-15 in the amount of $2,218,681,242. (No general fund impact) (Newens) |
| Recommended Action |
| Adopt the attached resolution (Exhibit A) establishing the County of Yolo appropriations limit for Fiscal Year 2014-15 in the amount of $2,218,681,242. |
| Strategic Plan Goal(s) |
| Provide fiscally sound, dynamic and responsive services |
| Reason for Recommended Action/Background |
Proposition 4, the constitutional amendment adopted by voters on November 6, 1979, was a formula for limiting future appropriations. Proposition 4 became effective beginning with FY 1980-81 and was designed to prevent governments from raising revenues and expenditures in excess of inflation or growth in personal income and population. The Proposition 4 limit formula began with FY 1978-79 proceeds of taxes as the base year appropriations adjusted annually by the lesser of the change in the cost of living or the change in California per capita personal income, adjusted by the change in population of the jurisdiction.
To counter the slow growth of appropriations limits, Proposition 111 (GANN Initiative) was passed by the voters in June of 1990. Proposition 111, which became effective FY 1990-91, updates the State's apporpriations limit to allow for new funding for priority state programs by changing the base year and formula for calculating the limit. Proposition 111 provides for the use of the FY 1986-87 appropriations limit as the new base, and expands the number of growth factors local governments now have the discretion to select.
The "appropriations subject to limitation" consists of "proceeds of taxes", as defined in the Government Code. This includes appropriations of both locally generated tax revenues and State subventions derived from tax revenues. User fees and service charges are exempt from the limit unless the charges exceed the cost of providing the service. The excess, if any, would be subject to the limit. The calculation for the prior six years is shown in Att. B - Taxes and Limits for comparison purpose.
Revenues in excess of appropriations, which exist for more than one year, are required to be returned to taxpayers by revision of tax rates.
The County's independent auditors review the computation of the appropriations limit for legal compliance on an annual basis.
Factors Selected for Calculating FY 2014-15 Appropriations Limit:
The limit for Yolo County is based upon the prior year's limit adjusted by the percentage of change in population of the county and the percentage of change in assessed valuation attributable to nonresidential new construction as presented in Att. C - Limit Computation.
Conclusion:
Using guidelines approved by the State Controller's Office, we find that Yolo County's proceeds of taxes are significantly below the appropriation limits established and applied on a consistent basis. Since 1978-79 the Yolo County appropriations limit has increased from $25,361,952 to $2,218,681,242 (a 8,648% increase). The increase is after adjusting the base year amount for subsequent changes in the cost of living, population, the West Sacramento incorporation and the shift of financial reponsibility of trial courts from the County to the State. In contrast, the amount of revenue subject to the limit has incrreased from $25,361,952 to $56,969,494(a 125% increase). Currently, the County has unused appropriations capacity of $2.162 billion. |
| Collaborations (including Board advisory groups and external partner agencies) |
| None |
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| Fiscal Impact |
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