Prop. 1a - About This Measure

Proposition 65 & Proposition 1A

A key issue that divided Sacramento for over a month is how best to protect local treasuries from state raids.

Supporters say that Prop. 1A is a landmark agreement between state and local officials that will permanently prohibit the state legislature from diverting tax dollars for other purposes beginning in 2006. City mayors and county supervisors have been complaining for years that the legislature had abused its authority over the use of local property taxes, having diverted $40 billion since 1992. In January, Gov. Schwarzenegger proposed taking $1.3 billion to help the state close its (estimated) $17 billion budget gap. At that point, local officials decided they had had enough.

Cities and counties banded together and qualified a constitutional amendment, Prop. 65, that not only would have prevented Schwarzenegger’s transfer, but also any future transfers without voter approval. After negotiations with the governor, local officials agreed to help the state in exchange for Schwarzenegger’s support of a similar constitutional amendment. A dispute between the legislature’s Democratic majority and the Republican governor over elements of the proposed measure held up the budget process for weeks.

Part of the budget agreement reached in early August was that cities and counties agreed to $2.6 billion in cuts over the next two years. In exchange, the governor and legislative leaders are supporting Prop. 1A, which will prohibit future raids and require the state to pay for any services it mandates on local governments.

Also, the measure could only be suspended if the governor declares a fiscal emergency and is supported by a 2/3 vote of the state legislature. Any money taken by suspension must be paid back within 3 years.

So far, there is no organized opposition but it is still early in the campaign.

Complicating matters is the fact that the original measure—Prop. 65—is still on the ballot. That means that Prop. 1A must receive more votes than Prop. 65 to take effect. The biggest difference between the two measures is when the prohibition on transferring funds begins. Prop. 65 applies to anything after January 2003, which means that the transfers of $1.3 billion that the governor, local officials and the legislature have agreed to could not be done. Prop. 1A imposes its restrictions beginning in 2006.

Prop. 65 generally requires state voter approval before the state can reduce any funding to local government.

Prop. 1A allows the funding cuts by declaration of a fiscal emergency by the governor and a 2/3 vote of the state legislature supporting such a declaration.

The coalition supporting Prop. 1A includes the governor, the League of Cities, and the State Association of Counties. They have raised more than $3.6 million during the last 2 years in support of the measure, but currently have less than $500,000 in the bank.

While expectations are that they will need around $10 million or more to carry on a statewide campaign, supporters are confident that with Gov. Schwarzenegger’s support, raising the necessary money to run a campaign will not be a problem.

• For more information see: Tom Chorneau, “Proposition
  1A gets Local, State Backing”,The Press Democrat, 
  October 3, 2004.