Hart Proposes Constitutional Amendment to Alter Gann Spending Limit

In a direct challenge to California’s voter-imposed limit on government spending, Sen. Gary K. Hart (D-Santa Barbara) introduced a constitutional amendment Monday that would increase the amount of taxpayers’ money state and local governments could spend.

Although it would leave the constitutional spending lid on the books, the measure would alter the formula for calculating the limit so that billions of dollars more could be devoted each year to such programs as education, highway construction, AIDS research and toxic waste cleanup.

Voter approval of Hart’s proposed amendment would virtually eliminate the possibility of state and local tax refunds, which otherwise could start occurring within the next several years.

If it is approved by the Legislature, which is by no means certain, the measure would go on the statewide ballot in June, 1988.

The constitutional spending lid, popularly known as the Gann limit after its sponsor, tax crusader Paul Gann, was overwhelmingly approved by California voters as Proposition 4 in 1979.

The idea of the limit was to prevent government expenditures from rising faster than the combination of population growth and the national rate of inflation.

Over the last seven years, only a few scattered cities and counties have reached their individual limits, as population growth and inflation continued to outpace government spending in most places. The state, as well as a number of cities, counties and school districts, expect, however, to hit their limits as early as next year.

Until this year, few politicians have been willing to attack the popular limit. Education leaders, faced with the prospect of substantial cuts that could hamper efforts to improve the state’s educational system, have stepped forward to call for a change in the Gann limit formula.

Earlier this month, Bill Honig, state superintendent of public instruction, said he would support legislative efforts to modify the limit and, if necessary, would lead an initiative drive to put such a measure on the ballot.

The proposal by Hart, chairman of the Senate Education Committee, is the first piece of legislation that tackles the Gann limit head-on.

Although Hart and Honig are offering slightly different proposals, both would alter the spending limit formula so that the lid is based on personal income rather than the slower-growing rate of inflation.

“The present limit is a roadblock in the path of our economic progress,” Hart said. “Unless we change this limit, we will not be able to address the critical problems we face in education, transportation and public safety.”

Hart noted that since the Gann limit was adopted in 1979, the number of inmates in state prisons has nearly tripled, the acquired immune deficiency syndrome epidemic has broken out, toxic waste has emerged as a substantial threat to public health and the state has put new emphasis on its educational and transportation systems.

“We have a different agenda today than we had in 1979,” he told reporters. “We need to have a first-rate and not a mediocre educational system.”

Hart’s proposal was promptly criticized by Ted Costa, a spokesman for Gann, who said government should “reorganize and consolidate” in order to stay within the limit.

“The Gann initiative is working and it’s working well and Hart doesn’t like it, so he wants to change it so he can keep on spending,” Costa said.

Honig welcomed Hart’s measure as a step that could place the issue before the voters without a costly and time-consuming initiative drive.

“That’s basically the proposal we were talking about,” Honig said. “We’re going to support it and do it cooperatively. Hart’s argument is the right argument: Let people vote on it.”

Both Hart and Honig count on backing from the sizable number of supporters of improving the educational system, including teachers, parents and business leaders.

They also hope that their proposal will appeal to businesses and members of the motoring public who favor major improvements to the state’s transportation system.

Nevertheless, Hart’s measure faces a tough battle in the Legislature from Republican lawmakers who want to cut government spending and give taxpayers a refund.

Last year, a proposed constitutional amendment that would have exempted spending on highway construction from the Gann limit died in the Legislature.