Staff Report
PREPARED BY: STEPHEN CONWAY
FINANCE DIRECTOR
Reviewed by: Town Manager, Assistant Town Manager, and Town Attorney
110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832
www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 06/06/2017
ITEM NO: 5
DATE: MAY 17, 2017
TO: MAYOR AND TOWN COUNCIL
FROM: LAUREL PREVETTI, TOWN MANAGER
SUBJECT: ADOPT A RESOLUTION ESTABLISHING THE FY 2017/18 GANN
APPROPRIATIONS LIMIT FOR THE TOWN OF LOS GATOS
RECOMMENDATION:
Adopt a resolution establishing the FY 2017/18 Gann appropriations limit for the Town of Los
Gatos.
BACKGROUND:
On November 6, 1979, California voters approved Proposition 4, commonly known as the Gann
Spending Limitation Initiative, establishing Article XIIIB of the California State Constitution. This
proposition, which became effective in fiscal year (FY) 1980/81, mandated an appropriations
(spending) limit on the amount of tax proceeds that the State and most local government
jurisdictions may appropriate within a fiscal year. Charges for services, fees, grants, loans,
donations and other non-tax proceeds are excluded. Exemptions are also made for voter-
approved debt prior to January 1, 1979 and the cost of court-related or Federal government
mandates.
The initiative was later modified by two propositions: Proposition 98 in 1988 and Proposition
111 in 1990. Proposition 98 established the return of tax revenues exceeding appropriation
limit levels to the State or citizens through a process of refunds, rebates, or other means.
Proposition 111 allowed more flexibility in the appropriation calculation factors.
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SUBJECT: ADOPT A RESOLUTION ESTABLISHING THE FY 2017/18 GANN APPROPRIATION
LIMIT FOR THE TOWN OF LOS GATOS
DATE: MAY 17, 2017
S:\COUNCIL REPORTS\2017\06-06-17\05 - GANN Limit\Staff Report FY 2017-18 Gann Appropriation Limit FINAL.docx 6/1/2017 2:29 PM SLL
DISCUSSION:
Attached for Council consideration is a resolution establishing an appropriations limit for FY
2017/18. The appropriations limit is based on population and per capita income data provided
by the State of California Finance Department. In alignment with State guideline s, the
appropriation limit for FY 2017/18 was calculated using a factor comprised of the change in
County or Town population (whichever is higher) and the change in California per capita
personal income. Calculation of the FY 2017/18 Gann Appropriations Limit is as follows:
The appropriations limit is the total amount of tax money that can be appropriated by the Town
in FY 2017/18. The proposed FY 2017/18 budget anticipates $26,974,522 in taxes, which is
$12,489,874 less than the appropriation limit of $39,464,396.
COORDINATION:
The Gann Appropriation Limit report was prepared by the Finance Department.
FISCAL IMPACT:
There is not direct identifiable fiscal impact from this action.
ENVIRONMENTAL ASSESSMENT:
This is not a project defined under CEQA, and no further action is required.
Attachments:
1. Resolution establishing the Gann Appropriation Limit for FY 2017/18
County Per Capita 2016/17 2017/18
Population Income Appropriation Appropriation Appropriation
Factor Factor Factor Limit Limit
1.0081 X 1.0369 =1.04529889 X 37,754,174$ =39,464,396$
FY 2017/18 Calculation