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Resolution Establishing the Appropriations Limit for FY2026-27 <br /> June 16, 2026 <br /> Page 2 <br /> Using the formula provided by the state, staff calculated the spending limitation from the <br /> "Proceeds of Taxes" at $1,591,945,027 (Exhibit 1) for FY26-27, a 4.6% increase over <br /> Fiscal Year 2025-26. Funds governed by the appropriations limit include the General <br /> Fund, the Capital Outlay Fund, and Special Revenue Funds. Exhibit 1 identifies the <br /> factors used to determine the inflationary increases from the prior year. Exhibit 2 <br /> categorizes the FY26-27 anticipated revenues under "Proceeds of Taxes" and "Non- <br /> Proceeds of Taxes." Exhibit 3 computes the FY26-27 appropriations subject to this <br /> limitation and identifies the difference between the limit and the budgeted appropriation. <br /> As demonstrated in Exhibit 3, the City's anticipated appropriations subject to limitation in <br /> FY26-27 are $328,803,299, which is approximately $1,263,141,728 or 79% below the <br /> calculated limit. This substantial margin demonstrates that the City's budgeted <br /> appropriations remain well within the constitutional spending limitation. <br /> The Gann Limit serves as an important fiscal safeguard by ensuring that growth in <br /> government spending supported by tax revenues remains aligned with changes in <br /> population and economic conditions. The City's appropriations are significantly below the <br /> allowable limit, indicating that the City has considerable capacity under the constitutional <br /> threshold and remains fully compliant with Article XIII B of the California Constitution. <br /> The proposed resolution has been prepared in accordance with applicable constitutional <br /> and statutory requirements. <br /> ENVIRONMENTAL IMPACT <br /> There is no environmental impact associated with this action. <br /> FISCAL IMPACT <br /> There is no fiscal impact associated with this action. <br /> EXHIBIT(S) <br /> 1. Computation of Appropriation Limit <br /> 2. Schedule to Categorize Anticipated Revenues <br /> 3. Appropriation Subject to Limitation <br /> 4. Resolution <br /> Submitted By: Alexander Trinidad, Executive Director, Finance and Management <br /> Services Agency <br /> Approved By: Alvaro Nunez, City Manager <br />