State law requires the County to set an appropriation limit for each fiscal year. The limit is based on appropriations only from proceeds of taxes. The appropriations limit amount is changed each year by a formula that uses a combination of percent changes in the price factor and the population factor.
In November 1979, California voters approved Proposition 4, which added Article XIII B to the State Constitution. This Article establishes limits, which restrict government spending of proceeds from taxes.
In June 1990, California voters approved Proposition 111 (Senate Constitution Amendment No. 1), which increased the choices of calculation factors and broadened the definition of appropriations exempt from the limit. In addition, this Amendment requires that the County Board select the growth factors to be used in calculating the appropriations limit.