Honig to Lead Ballot Effort to Alter Gann Spending Curb

Bill Honig, superintendent of public instruction, who kept a low political profile during his first term, is emerging as the leader of a drive to substantially change the state’s popular constitutional limit on spending.

Although other politicians have balked at challenging the spending limit, Honig stepped forward after he was sworn in for a second term Monday and announced that he will sponsor a 1988 ballot measure to raise the limit and allow state and local governments to spend more of the tax money they take in.

In an interview Tuesday, Honig argued that a lifting of the spending curb is essential if improvement in the quality of education in California is to continue.

“The reason I’m speaking up is that the schools are the ones that are hurt the most,” the politically nonpartisan schools chief said.

Commonly known as the Gann limit, the spending curb was overwhelmingly approved by the voters in 1979 as Proposition 4.

It limits the amount that state and local government spending can increase each year by linking the permitted increase to the inflation rate and the growth of population in the state or, in the case of local governments, the population growth of the county or municipality in question.

In past years, state spending has been below the permitted rate, and the limit has never before come into play at the state level. By next year, however, the state could be required to return money to the taxpayers rather than spend it on education and other programs.

Senate Democrats, meanwhile, announced on Tuesday that they are searching for ways to avoid reaching the spending threshold this year by diverting state revenues to city and county governments.

Some local governments also have reached or are near their own Gann limits, however, and may not be in a legal position to spend the extra money.

Another problem, from the viewpoint of many legislators, is that in order for the transferred money to avoid being counted as state spending, it would have to be sent to the local governments without any strings attached. The Legislature traditionally has been reluctant to lose control over how its appropriated funds are spent.

Senate President Pro Tem David A. Roberti (D-Los Angeles) told reporters, “That’s the price we’d have to pay.”

Honig said he has taken on the issue of the spending limit because he is afraid that curtailing spending would seriously set back efforts to improve the state’s educational system.

“Right now, it forces schools to grow (at a rate) below the level of the economy, and that hamstrings this whole society, this whole state,” he said.

Despite several years of increased spending on schools under Gov. George Deukmejian, Honig noted, California still ranks 42nd in the nation in per capita spending on public education.

Billions of dollars in increased spending on education are necessary to help California students compete successfully with youngsters from other industrialized states, he said.

Personal Income Index

Honig said his proposed constitutional amendment would alter the Gann limit by tying it to the rate of increase in California personal income, rather than the rate of inflation. Personal income, which has been rising faster than the national rate of inflation, would be a more accurate measure of California’s economic growth and a better index for the spending limit, he said.

Last year, the state came within $50 million of the spending limit, the closest it has come since voters approved the measure. This year, unless there are some substantial budget cuts, it seems certain that the limit will be met for the first time.

Honig said he is hoping to win the support of business leaders who are concerned not only about education but also about potential cutbacks in highway construction and other essential services. Last year, business leaders attempted unsuccessfully to put a constitutional amendment on the ballot that would have exempted road construction from the limit.

Local government officials also are likely to back Honig’s proposal to modify the limit because they, too, are beginning to feel the pinch of the Gann limit.

“Some realistic adjustment would be appropriate, and the voters are the ones to make that decision,” said Larry Naake, a lobbyist for the County Supervisors Assn. of California.

Opposed by Deukmejian

The biggest obstacle to a change in the limit could be Deukmejian, who has indicated that he likes the idea of curbing state spending and presiding over a tax refund. Repeatedly, Deukmejian has declared his opposition to repeal of the limit.

Honig said, “We hope we can get enough key people to say to the governor that giving a tax refund at the expense of schools or infrastructure is a mistake.”

Honig, a former Democrat, said he will ask the Legislature to place the constitutional amendment on the ballot. If that fails, he said, he will organize an initiative drive to put the measure before the voters.

While Honig began pursuit of a long-term solution, Senate Democratic leaders Tuesday gingerly advanced a short-term remedy designed to soften the effect of the first bite of the Gann limit and buy time until 1988, when the issue could be put before voters.

Basically, the proposal would help state government slip under the Gann restriction by transferring some of its revenue to cities and counties.

Roberti noted, however, that such a transfer of revenues would do virtually nothing for the fiscal difficulties of some counties that already have almost reached their Gann limitation. “You would have an element of unfairness,” he conceded.

As for Los Angeles County, Roberti said he was told by county supervisors that a “terrible crunch” is being felt by law enforcement, fire and jail operations and that additional state aid is desperately needed.