Nothing Sneaky Here : Contrary to Rumor, Prop.111 Won’t End the Gann Limit

Is Proposition 111 a ruse to blow the lid off spending altogether . . . to allow government to seize even more of our paychecks? Absolutely not.

Yet these allegations are being made by fringe elements that oppose Proposition 111. There has been no visible opposition campaign so far, but such irresponsible statements have been spread throughout the state in the ballot pamphlet that is being mailed to every registered voter. Opponents, including Los Angeles County Supervisor Peter F. Schabarum and economist Arthur Laffer, claim that Proposition 111 would “eliminate the Gann limit.” This is not true.

Compounding the deception, Schabarum et al. demand to know why lawmakers would want to eliminate the Gann limit. “So they can raise your taxes, of course,” they contend. But the Gann limit does not prevent the raising of taxes now. And with or without Proposition 111, as stipulated by Proposition 13, there still can be no tax increase without a two-thirds vote of the Legislature.

Would Proposition 111 raise our taxes at all? Absolutely. There is no attempt to hide that point. The main feature of the measure would hike the state gasoline tax from the present 9 cents per gallon by an initial 5 cents a gallon beginning Aug. 1. The tax would go up an additional penny a gallon each subsequent Jan. 1, topping out at 18 cents in 1994. In 10 years, $18.5 billion would have been invested in a state transportation system that has been badly neglected the past 20 years.

In order to spend the new gasoline-tax money, Gov. George Deukmejian and the Legislature have had to propose a modest relaxation of the Gann limit, the state spending ceiling enacted into law back in 1979 by the approval of Proposition 4.

Here are some other facts about Proposition 111:

--Californians generally pay less state tax than they did a decade ago. According to Deukmejian’s current budget, we give up $7.50 for each $100 of personal income. In 1979-80, it was $7.78. Also, local property taxes declined from $6.40 for each $100 of personal income before Proposition 13 to about $3 a decade later--a savings of billions of dollars that continues today.

--The gasoline tax is one of the lowest in the nation. In per-capita spending on state highway and transportation programs, California ranks 49th in some surveys, 50th in others.

--The change in the Gann-limit formula in Proposition 111 is a small one. The law now allows state spending to increase annually on the basis of population gain and the lesser of two factors: the U.S. cost-of-living index or California per-capita income. Proposition 111 would allow growth equal to the income factor, which usually runs slightly higher than the U.S. figure. Increases in school population also would be reflected in the formula.

--Proposition 111 actually makes it more likely that revenues in excess of the Gann limit would be rebated to taxpayers. Under Proposition 98, passed two years ago, most money collected over the Gann limit go to schools rather than back to taxpayers. Under Proposition 111, it would be split evenly between schools and tax rebates.

Proposition 111 is complex because state law is complex. But it’s not sneaky. There is no attempt to put anything over on anybody. Proposition 111 is a clear-cut effort to give California a workable transportation system. The cost of not doing that would be the cruelest tax of all.