How the Gann Limit Interacts with Cap-and-Trade
Overview This article explores whether California should include revenue from its cap-and-trade program in the state’s appropriations limit. California voters enacted Article XIII B of the state constitution in 1979 (Proposition 4) to constrain state and local spending. That provision limits state appropriations to 1978 spending levels, plus the growth of the state’s population and personal income. This is commonly called the “Gann Limit,” after the measure’s author, conservative political activist Paul Gann. It applies to spending from tax revenues and other proceeds, including regulatory licenses, user charges and fees, and tax revenue investment. The state reached the Gann Limit...