Senate Committee Endorses Constitutional Constraints on State and Local Revenue and Spending
- Establish formulas for capping the rate of revenue growth for the state, each school district and technical college district, and most other local governmental units.
- Require state revenue collected in excess of the cap to either be deposited into a budget stabilization fund or returned to taxpayers in the next fiscal year.
- Require local revenue in excess of the cap to be returned to taxpayers in the next fiscal year.
- Limit spending from the state budget stabilization fund – so it can only be used: a) to provide tax relief, b) for certain emergency events, or c) in a fiscal year in which the amount of allowable revenue is greater than the amount of collected revenue.
- Require approval of the electorate at a referendum before the state or any local governmental unit may: increase its allowable revenue above the cap; incur debt service by an amount that exceeds 7% of allowable revenue; or exclude any tax, fee, or charge from allowable revenue.
- Authorize local governmental units to exempt themselves from any mandate imposed by the state if the state reduces the percentage of the costs that it pays, or from any new mandate if it is not fully funded by the state.
SJR 48 was introduced in late October and was given a public hearing last Wednesday (Feb. 28). If it is approved by both the Senate and Assembly this year, it would have to win legislative approval again in the 2013-14 session, before being submitted to a public referendum.