Government Spending Limits. Initiative Constitutional Amendment.

Imposes further limits on state/local government spending by: changing base year for calculating state spending limit; redefining the words tax, population and cost-of-living for purposes of calculating limits; subjecting capital outlay, certain transportation projects and natural disaster to expenditure limits. Repeals requirement that Legislature establish Prudent State Reserve Fund; repeals provisions of Proposition 1A (approved on November 2004 ballot) regarding state mandates on local government. Shifts 50% of excess state revenues from schools to transportation fund until repaid, then to taxpayer rebates and credits. Authorizes taxpayer suit for violation of measure. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local governments: Potentially significant reduction in annual state and local government spending. Reduction in the annual minimum funding requirement for K-12 schools and community colleges