Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2010
 

California Constitutional Provisions

Article XIII B Constitution Government Spending Limitation

Section 5

Sec. 5. Contingency, etc., funds. Each entity of government may establish such contingency, emergency, unemployment, reserve, retirement, sinking fund, trust, or similar funds as it shall deem reasonable and proper. Contributions to any such fund, to the extent that such contributions are derived from the proceeds of taxes, shall for purposes of this Article constitute appropriations subject to limitation in the year of contribution. Neither withdrawals from any such fund, nor expenditures of (or authorizations to expend) such withdrawals, nor transfers between or among such funds, shall for purposes of this Article constitute appropriations subject to limitation.

Construction.—A county could not exclude from its annual appropriations contributions to its employees' retirement fund, since they did not constitute excludable debt service within the meaning of Article XIII A, Section 1 and Section 9 of this Article. The specific language of this section stating that the contributions are subject to the limit prevails over the general provisions, since that interpretation accomplishes this Article's purposes of limiting the growth of appropriations and the expenditure of taxes. Also, the county could not exclude such contributions because the retirement board to which the contributions were made was totally distinct from the county. The section specifically deems the contributions as subject to limitation. Also, the section is not to be applied prospectively for purposes of determining whether an entity's contributions to its employees' retirement fund are subject to the limitation. "Each entity of government may establish such . . . retirement . . . funds", when viewed in the context of the entire provision, merely restates existing and specifically identifies those funds to which contributions are subject to the limitation. Santa Barbara County Taxpayers Assn. v. Santa Barbara County, 194 Cal.App.3d 674; San Francisco Taxpayers Assn. v. Board of Supervisors, 2 Cal.4th 571.

Retirement.—The word "retirement" in the section does not refer to the retirement of debt. Santa Barbara County Taxpayers Assn. v. Santa Barbara County, 194 Cal.App.3d 674.