Back in 1980 California voters adopted Article XIIIB of the California State Constitution or more commonly referred to as the “Gann Limit”. The measure placed limits on the amount of tax proceeds that state and local governmental agencies can receive and appropriate (authorize to spend) each year. This limit is different for each state agency and it can change annually.
When Proposition 111 passed in June 1990 the calculation for the annual appropriation limit changed. According to this staff report adopted by the city council of Mission Viejo, the law now requires a governing body to adopt annually, by resolution, an appropriations limit for the following year, along with a recorded vote regarding which of several annual adjustments factors have been selected. Mission Viejo established their appropriations limit at $296,380,303 for 2012-2013. All supporting documents can be found here, under number 17.
Many cities choose between the population growth of either their city or county. Mission Viejo could have chosen between the growth in statewide personal income or growth in local assessed valuation. The resolution attached to this report specifies the City’s FY 2012-13 appropriation limit and the factors selected to determine that limit.
This report was prepared and reviewed by Cheryl Dyas, Director of Administrative Services/City Treasurer and submitted by Dennis Wilberg, City Manager.