Exhibit A
1 ARTICLE XIIIB APPROPRIATIONS LIMIT
Fiscal Year 2022-23
Article XIIIB of the California Constitution was created by the passage of Proposition 4 in November 1979 and establishes a limit on the amount of tax revenue which can be appropriated by government jurisdictions. This limit is popularly known as the Gann Limit. Each year, the limit is recalculated by multiplying the previous year’s limit by adjustment factors for population growth and inflation. Proposition 111, passed in June 1990, gave cities t he option of using their own growth or the growth of the entire county in which the city is located as the population adjustment factor. Cities were also given the option of using the increase in California Per Capita Income or the increase in the assessed valuation of non-residential property in the City as the inflation adjustment factor. Cities have the option each year of deciding which factor to use.
For 2022-23 Oakland is using the population growth of the C ounty of Alameda and the increase in Ca lifornia Per Capita Income. These adjustment factors must be applied to retroactively recalculate the appropriations limit for 1987- 88 (i.e., the base year) and each year thereafter in order to arrive at the limit for 2022-23.
In March 2020, City of Oa kland voters passed Measure S , which increased the City’s appropriations limit until March 3, 2024 to allow the City to continue to spend tax revenue from voter-approved local tax measures, including Measure M ( The Emergency Medical Services Retention Act of 1997), Measure N ( The Paramedic Services Act of 1997), Library Measure Q (The Library Services Retention and Enhancement Act of 2004 ), Measure C ( Transient Occupancy Tax - Hotel Tax), Measure Z ( The 2014 Public Safety and Services Violence Prevention Act), Measure HH (Sugar Sweetened Beverage Distribution Tax), Measure D (The 2018 Oakland Public Library Preservation Act), Measure W (Oakland Vacant Property Tax Act), Measure AA (The Children ’s Initiative ) and Measure Q ( Oakland Parks and Recreation Preservation, Litter Reduction, and Homelessness Support Act – “OPR Preservation”) .
FY 2021-22 Appropriations Limit $729,160,017
FY 2022-23 Adjustment Factors
County of Alameda Population Change = -1.0062 (-0.62%) California Per Capita Income Change = 1.0755 (7.55%) Combined Change = (-1.0062) x 1.0755 = 1.0688
FY 2022-23 Appropriations Limit
(After Adjustment for Growth Factor of 1.0688) $779,326,226
ADD BACK:
Emergency Medical Services 2,428,283
Paramedic Services 1,933,936
Library Services 18,724,130
Hotel Tax 6,541,894
Public Safety and Violence Prevention Services 19,598,935 Sugar Sweetened Beverages 6,911,494 Public Libraries Preservation 14,257,902
Exhibit A
2 Vacant Properties 5,378,388
Children’s Initiative 37,389,400
OPR Preservation 28,988,424
TOTAL Gann Appropriation Limitation $921,479,012
Not all City appropriations are subject to the l imitation of Article XIIIB. The intent of Proposition 4 was to restrict only the appropriation of “proceeds of ta xes.” Determining which appropriations are subject to the limit requires classifying each funding source as either proceeds of taxes or non- proceeds of taxes. Property tax and local taxes are subject to l imitation. State taxes that are subvented to the City count against the City’s limit if their use is unrestricted, as in the case of sales tax and motor vehicle in lieu. State subventions tha t are restricted in use are applied against the State’s limit rather than the City’s, so they are considered no n-proceeds of taxes for the City’s calculation. This includes Measure B sales tax, gas tax, and state grants and state-mandated cost subventions included in the Grants and Subsidies category. Interest incom e is prorated so that the interest earned on tax revenue is included as proceeds of taxes.
Most of the City’s other revenue sources are classified as non -proceeds of taxes: franchise fees, Landscape and Lighting Assessments (special benefit assessment districts are excluded fr om the limitation), fines and penalties, license and permit fees, service charges, rentals and concessions, federal grants, Oakland Redevelopment Agency reimbursements (redev elopment agencies are exempt from Article XIIIB), internal s ervice revenues, and other miscellaneous revenues.
Enterprise funds – sewer service charges and golf course revenues – are also exempt from the limitation. Fund transfers are re -appropriations o f revenue received in previous years; these funds were included in the calculation of appropriations subject to limitation in the year they were received and are not counted twice.
Exhibit A
3 ARTICLE XIIIB - APPROPRIATIONS SUBJECT TO LIMITATION
FY 2022-23
Revenue
PROPERTY TAX $454.66 $454.66
STATE TAX
Sales Tax 92.47 62.60 29.87
Gas Tax 22.44 22.44
Subtotal, State Taxes $114.90 $62.60 $52.30
LOCAL TAX ES
Business License Tax 111.88 111.88
Utility Consumption Tax 54.40 54.40
Real Estate Transfer Tax 112.20 112.20
Transient Occupancy Tax 30.53 30.53
Parking Tax 21.99 21.99
Sugar Sweetened Beverage Tax 6.91 6.91
Special Taxes 129.50 129.50
Subtotal, Local Taxes $467.41 $467.41
LANDSCAPE & LIGHTING ASSESSMENT 19.16 19.16
INFRASTRUCTURE BOND 120.39 120.39
OTHER LOCAL FEES 48.63 48.63
SERVICE CHARGES 224.79 224.79
GRANTS & SUBSIDIES 182.65 182.65
MISCELLANEOUS 143.26 143.26
FUND TRANSFERS 479.67 479.67
SUBTOTAL REVENUES $2,255.52 $984.67 $1,270.84
INTEREST (Prorated) 0.59 0.48 0.10
TOTAL REVENUE $2,256.10 $985.16 $1,270.94
EX EMPTIONS* (174.20)
APPROPRIATIONS SUBJECT TO LIMITATION 810.95
APPROPRIATIONS LIMIT 921.48
OVER/(UNDER) LIMIT ($110.53)
* Property tax revenue appropriated to service voter-approved debt is exempted.
Total Proceeds of
Taxes
Non Proceeds
of Taxes