Gann

Prop 13 of 1978 was a major change to state and local fiscal policy in California. The following year, voters - still in an anti-tax mood - enacted Prop 4 which established the Gann revenue limit which calculates a cap on spending. Revenues above the Gann limit were to be refunded. In the second half of the 1980s, state state hit the Gann limit and there were refunds. This episode then triggered Prop 98 of 1988 dealing with K-14 funding and Prop 111 of 1990. In effect, some appropriations were excluded from Gann, allowing additional spending and diverting more funding toward K-14. The revised Gann limit was hit at the peak of the dot-com boom but since then it hasn't been a factor in state fiscal policy.

Gov. Brown has proposed a recalculation of Gann because the state is now close to hitting the limit again. The Legislative Analyst's Office (LAO) warns, however, that his approach is legally questionable. Thus, Gann may again become a constraint. As such, hopes that in particular UC might be in line for more state funding may be unrealistic.

The LAO's analysis of Gann can be found at:
http://lao.ca.gov/reports/2017/3596/gann-limit-030217.pdf