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APPROVE REVISED GANN LIMIT FOR FISCAL YEAR 2023-24
recommended action
RECOMMENDATION
It is recommended that the City Council approve by resolution the revised Fiscal Year (FY) 2023-24 California Constitutional (Gann) Appropriations Limit of $463,417,917.
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Summary
The Gann Limit establishes a general fund appropriation limit tied to historic size of government. On June 20, 2023, the Proposed Annual Budget for FY 2023-24 was presented to City Council, and Resolution 2023-06-20-1601 was adopted, establishing a Gann Limit of $441,817,074. Total General Fund appropriations of $259,884,645 were under the limit. The Gann Limit presented in the resolution should have been $463,417,917.
DISCUSSION
Background
Propositions 4 (1970) and 11 (1990) established state and local government General Fund appropriations limits. The limit for the growth rate of those appropriations is the percentage increase in the cost of living and the percentage increase in the population. Each year City staff calculates the appropriation limit using information provided by the California State Department of Finance.
The amount presented in Resolution 2023-06-20-1601 adopting the FY 2023-24 Budget was $441,817,917 and should have been $463,471,917. There was no financial impact on the FY 2023-24 Budget as the Gann Limit was underreported and higher than the proposed General Fund appropriations. A resolution documenting this change is required for clerical purposes only.
Legislation Text:
FY 2023-24 Gann Appropriation Limit
The California Constitution limits growth in local government spending and establishes a maximum limit for expenditures from general taxes. The law, commonly known as the Gann Limit, requires that the limit is recalculated and approved annually by the City Council at the beginning of each fiscal year. The Gann Limit is indexed to specified growth factors approved by the Legislature and applied to revenue appropriations. The City’s FY 2023-24 Gann Limit, as calculated is $463,417,917, and exceeds the proposed appropriations subject to the limit of $259,884,645. The City’s appropriations remain well within the Constitutional appropriations limit.
Resolution 2023-06-20-1601 text:
An appropriation limit is established in the amount of $441,817,074 for FY 2023-24 pursuant to the requirements of the California Government Code. The City of Stockton selected the “change in California per capita personal income” for the “change in cost of living” component and the change in annual population for the County of San Joaquin as of January 1, 2023, component in the calculation of the appropriation limit.
Present Situation
As part of the Annual Comprehensive Financial Report (ACFR) compliance, the revised FY 2023-24 Gann Limit of $463,417,917 is presented to City Council for approval.
FINANCIAL SUMMARY
There is no financial impact as a result of taking the recommended action.
Attachment A - GANN Limit Legislation