Supervisors Place Waiver to Gann Spending Limit on June Ballot

Facing the prospect of being unable to spend millions of tax dollars and other revenues, the San Diego County Board of Supervisors on Wednesday agreed to ask voters in June to raise the so-called Gann spending limit.

By a unanimous vote, the supervisors, seeking to “untie the county’s financial hands,” authorized a ballot proposition that, if approved by a majority vote, would adjust the Gann limit to enable the county to spend all funds generated by taxes and state grants.

Without the adjustment, the Gann limit--a statewide measure approved in 1979 that restricts government spending under a formula based on population growth and the inflation rate--could reduce county revenues by at least $8 million annually and preclude the county from taking advantage of about $35 million in state revenue for courts, county administrators said.

In essence, the Gann limit’s existing cap on expenditures would require the county, now operating under a $1.1-billion annual budget, to spend less money than would be available through tax revenue and other sources. Combined with related financial problems, the limit could produce an expenditure gap of $46.4 million next year and a $161.8-million gap over the next five years, according to county projections.

“I don’t see any other way that we can survive in the short term,” Supervisor John MacDonald said of the proposal to increase the county’s spending limit.

Fearful that their action could be misinterpreted by voters, the supervisors went to great lengths Wednesday to emphasize that the proposed ballot proposition would not increase taxes, but rather would simply allow the county to spend funds created by existing taxes and available through other sources.

“We’re not asking for more money--we only want to be able to spend what’s available now,” Supervisor Susan Golding said.

Similar City Measure

During earlier debates on the issue, several supervisors expressed concern about placing the Gann waiver proposal--similar to a measure approved by City of San Diego voters last fall--on the June 7 ballot, which already includes several other tax and spending proposals.

In January, the supervisors voted to place on the ballot a proposed half-cent sales-tax increase that would raise $1.6 billion for jails and courtrooms over the next 10 years. A statewide initiative to ease the Gann limit’s restrictions by altering the formula by which it is calculated also will be put before voters in June.

The multiple Gann proposals could confuse voters, supervisors argued, adding that the public also might balk at being asked to simultaneously increase the sales tax and ease government spending restrictions. In addition, the sales tax, currently 6%, is scheduled to climb to 6.5% in June as a result of the public’s approval in November of Proposition A, a measure designed to improve regional transportation.

Decision Due

While those factors initially led some supervisors to argue that November might be a more politically propitious time to submit the local Gann measure to voters, they ultimately opted for a June election in order to avoid potentially losing the $35 million in state funding for courts. The county must decide by Aug. 1 whether to participate in the state program--which it could not do unless voters approve the Gann waiver before then, because the $35 million would put the county over its current spending limit.

“Without a Gann limit adjustment . . . it will not be practical for the county to participate in the Trial Court Funding Program,” according to a county report. “These block grant funds would then be retained by the State of California and not benefit the citizens of San Diego County.”

Under the proposed ballot proposition, the existing Gann ceiling would be adjusted for the next four years to allow the county to spend “an amount equal to the . . . proceeds of existing local taxes and available state subventions.” The proposition adds that those funds would be spent “in support of essential public services which include but are not limited to public safety, health care, children and family services, senior care, parks and recreation and public facilities.”