Brown Administration Changes Budget Calculation Following Republican Lawmakers' Call for Transparency and ahead of Tuesday's Budget Conference Committee

Tuesday, May 30, 2017

Today, state lawmakers in the Senate and the Assembly will meet at 2pm in room 4203 of the State Capitol, to discuss budgetary differences between the two houses.

Republican lawmakers are closely monitoring the Brown Administration’s budget calculations following the nonpartisan Legislative Analyst’s Office’s testimony that Administration officials may be spending nearly $2 billion over the voter-approved spending limit.

GOP legislators echoed those concerns and demanded transparency, and the Administration withdrew its proposal regarding the voter-approved spending limit. Click here to see a clip of the administration official’s testimony.

“Elected officials must adhere to the will of the people. Legislative Democrats and government officials cannot pick and choose which laws are followed,” said Senator Jim Nielsen (R-Tehama). “Administration officials must now follow through and provide all necessary information for the people to see that the constitutional requirements are being met.”

Assemblyman Jay Obernolte added, “In January, the Administration began using a new methodology implementing the Gann Limit which violates the Constitution and the will of the voters. I’m pleased that the Administration now agrees with Assembly and Senate Republicans’ call to adhere to this critically important spending limit.”

On Wednesday, May 24, Senator Nielsen and Assemblyman Obernolte sent a letter to the Director of Finance demanding information regarding the Administration’s method of calculating state spending under the voter-enacted constitutional spending limit known as the State Appropriations Limit or ‘Gann limit.’

Under state law, anyone with concerns has 45 days upon the adoption of the budget to challenge the Governor’s calculation.

Please click here to read Nielsen’s and Obernolte’s letter in its entirety and the legislative counsel opinion.

BACKGROUND: The Governor’s January budget proposal significantly altered the method of calculating the Gann limit, which would have consequences for the Legislature’s choices on state spending.  If the state spends above the Gann limit for two consecutive years, the California Constitution automatically directs the excess spending to certain education programs and to tax rebates.

On March 2, 2017, the LAO issued a report that identified major concerns with the Governor’s revised methodology.  The LAO concluded that the new method could violate the state constitution as a result of what the LAO described as “nowhere money,” meaning expenditures that are counted against neither local spending limits nor the state’s spending limit.  The effect is to improperly raise the state’s limit, thus providing “extra room” for state spending to increase without triggering the constitutional requirements.  

Gann Limit: a voter approved Constitution Amendment passed by voters in 1979 to “establish an annual appropriations limit for the state and for each entity of local government.”

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Elected to the State Senate in January 2013, Senator Nielsen represents the Fourth Senate District, which includes the counties of Butte, Colusa, Glenn, Placer, Sacramento, Sutter, Tehama and Yuba. Visit his website: and please follow him on Twitter & Facebook.

Assemblyman Jay Obernolte represents the 33rd Assembly District, which includes the San Bernardino County communities of Adelanto, Apple Valley, Baker, Barstow, Big Bear City, Big Bear Lake, Big River, Crestline, Fort Irwin, Hesperia, Johnson Valley, Lake Arrowhead, Lenwood, Lucerne Valley, Needles, Oak Hills, Phelan, Running Springs, Silver Lakes, Trona, Twentynine Palms Base, Twin Peaks and Victorville. For more information, please follow Assemblyman Obernolte on Twitter & Facebook.