Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2013
 

California Constitutional Provisions

Article XIII B Constitution Government Spending Limitation

Section 1

Section 1. Total annual appropriations; limitation. The total annual appropriations subject to limitation of the state and of each local government shall not exceed the appropriations limit of the entity of government for the prior year adjusted for the change in the cost of living and the change in population, except as otherwise provided in this article.

History.—The amendment of June 5, 1990, substituted "the" for "such" after "limit of", substituted "the change" for "changes" after "adjusted for", added "the change in" before and a comma after "population", and substituted "article" for "Article".

Construction.—This article does no more than place a ceiling on the expenditure of general state and local tax revenues and does not encompass special assessments and federal grants for the financing of the cost of acquisitions and construction of improvements in a sewer assessment district. Placer County v. Corin, 113 Cal.App.3d 443. This article does not limit the ability to expend government funds collected from all sources. With respect to local governmental entities, limits are placed only on the authorization to expend the proceeds of taxes levied by or for that entity, in addition to proceeds of state subventions. Oildale Mutual Water Co. v. North of the River Mun. Water Dist., 215 Cal.App.3d 1628. This Article does not violate the prohibition against impairment of contracts relating to a local government's retirement obligations. Although Section 5 includes contributions to retirement funds within the limitations, this Article does not repudiate or even modify any contractual right or obligation. San Francisco Taxpayers Assn. v. Board of Supervisors, 2 Cal.4th 571.

The purpose of this article is to hold government expenditures at their 1978–79 level, adjusted for changes in the cost of living, population and transfers of responsibilities from one entity of government to another. The subsequent enactment of Health and Safety Code Section 33678 is not violative of such purpose. Brown v. Community Redevelopment Agency, 168 Cal.App.3d 1014.

Transit fees imposed on developers of new office buildings as a condition of issuance of certificates of completion and occupancy are not "proceeds of taxes" within the meaning of this article since the fee was not a special tax within the meaning of Article XIII A, Section 4 of the Constitution and was not within the ambit of Article XIII A. Russ Building Partnership v. San Francisco, 199 Cal.App.3d 1496; Pacific Gateway Assoc. Joint Venture v. San Francisco, 199 Cal.App.3d 1496; Crocker National Bank v. San Francisco, 199 Cal.App.3d 1496. If a fee is not a special tax within the meaning of Article XIII A, it is not the type of revenue intended to be controlled by Article XIII B. Trend Homes, Inc. v. Central Unified School District, 220 Cal.App.3d 102.

Payment of money judgments.—The initiative limitations on taxing and spending contained in Article XIII A, Article XIII B, and Article XIII C do not preclude judicial enforcement by writ of mandate of a judgment imposing inverse condemnation liability, an obligation imposed by statutory . Payment of such a judgment does not implement a municipal "purpose" within the meaning of the Articles' provisions; rather, such payment acts solely to vindicate the constitutional rights of the landowner. F & L Farm Co. v. City Council of the City of Lindsay, 65 Cal.App.4th 1345. This article prohibits a county from levying property taxes in excess of 1 percent to pay a money judgment under Harbors and Navigation Code Section 6361 and Government Code Sections 970 through 971. Although Section 6361 authorizes a board of supervisors to levy a special tax sufficient to meet a port district's annual estimate of the amount of money it will need "for all purposes," that statute has been superseded by the statutes implementing Proposition 13 insofar as they are inconsistent. Formulae for the distribution of tax funds to local agencies and districts have been enacted by the Legislature (Rev. & Tax. Code, Sec. 93 et seq.), and a district can no longer expect a county to levy taxes to raise whatever sum the district budget calls for. (Disapproving F & L Farm Co. v. City Council, 65 Cal.App.4th 1345 to the extent it holds to the contrary.) Ventura Group Ventures, Inc. v. Ventura Port District, 24 Cal.4th 1089.