Propositions 1A and 65 both seek to limit state authority over local finances. The idea of drafting a ballot initiative to secure local government funding began in 2001 with conversations among the California Special Districts Association, the League of California Cities, and the California State Association of Counties. The three associations temporarily shelved their initiative strategy, forming the Leave Our Community Assets Local (LOCAL) coalition in order to focus on promoting change through legislative channels. In September 2003, citing the state's continued targeting of local government funds to balance the budget, the initiative drive resumed, culminating in Proposition 65.
With voter support in question, the proponents of Prop. 65 decided to work with the Governor to craft a legislative solution. An alternative plan for reducing state authority over local finances (SCA4) was passed by the legislature at the end of July 2004. This plan will go before the voters as Proposition 1A. All of the official proponents of Proposition 65 now support Proposition 1A.
If both Proposition 1A and 65 are approved and Proposition 1A receives more yes votes, none of the provisions of Proposition 65 will go into effect.
Proposition 1A & 65
Proposition 65 limits state authority to reduce major local tax revenues. Its restrictions apply to state actions taken over the last year, and thus would prevent a major component of the 2004-05 budget plan (a $1.3 billion property tax shift in 2004-05 and again in 2005-06) from taking effect unless approved by the state's voters at the subsequent election. In future state budgets, Proposition 65 would permit the state to modify major local tax revenues for the fiscal benefit of the state, but only with the approval of the state's voters.
Prop. 65 reduces state authority to reallocate tax revenues among local governments, requiring voter approval before the state can reduce any individual local government's revenues from the property tax, uniform local sales tax, or vehicle license fee. The local governments affected include cities, counties, special districts, and redevelopment agencies.
The measure also restricts state authority to impose mandates on local governments without reimbursement. It authorizes local governments, schools, and community college districts to decide whether or not to comply with a state requirement if the state does not fully reimburse local costs.
Proposition 1A also restricts state authority to reduce major local tax revenues, however its restrictions apply to future state actions only, and would allow the planned $1.3 billion property tax shifts to take place in 2004-05 and 2005-06. In future budgets Proposition 1A allows for limited, short-term shifting of local property taxes. The state must repay local governments for these property tax losses within five years.
Prop. 1A prohibits the state from reducing any local government's revenues from local sales taxes, but maintains some state authority to alter the allocation of property tax revenues, vehicle license fee revenues, and other taxes. Proposition 1A does not include a state voter approval requirement. Its restrictions do not apply to redevelopment agencies.
The measure also restricts state authority to impose mandates on local governments without reimbursement. However, Prop. 1A's mandate provisions do not apply to schools and community colleges. If the state does not fund a mandate in any year, the state must eliminate local government's duty to implement it for that same time period.
Official Voter Information
Prop. 1A: Individual Campaign Committees
Prop 65: Individual Campaign Committees
Total Contributions and Expenditures (select "Nov. 2005 election" and "Prop. 1A" or "Prop. 65" in dropdown boxes)