California's Proposition 4: The Gann Limit

In the wake of the passage of Prop 13 in 1978, Paul Gann - one of the two sponsors of Prop 13 - put Prop 4 on the ballot. Prop 4 imposed a spending limit-by-formula on state government and contained other features. If revenues exceeded the limit, tax rebates were required. Prop 4 passed but spending dropped well below the limit during the budget crisis of the early 1980s. However, during Gov. George Deukmejian's second term, a rebate was triggered. Thereafter, under the later Propositions 98 and 111, the Gann Limit was largely gutted. The limit played no role in state fiscal affairs until the dot-com boom substantially boosted state revenues and spending. It appears in hindsight that the limit may have been exceeded at the peak of the boom, but no rebated was triggered. The budget crisis of the early 2000s again meant that spending has been well below the limit. There have been gubernatorial attempts to enact initiatives with spending limits under Governors Reagan, Wilson, and Schwarzenegger. All of these failed. Prop 4 is the only such initiative to pass.

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News & Politics

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• Gann
• Proposition-4
• California
• fiscal
• Proposition-13