May 2023
Dear Fiscal Officer:
Subject: Price Factor and Population Information
Appropriations Limit
California Revenue and Taxation Code section 2227 requires the Department of Finance (Finance) to transmit an estimate of the percentage change in population to local governments. Each local jurisdiction must use their percentage change in population factor for January 1, 2023, in conjunction with a change in the cost of living, or price factor, to calculate their appropriations limit for fiscal year 2023-24. Attachment A provides the change in California’s per capita personal income and an example for utilizing the price factor and population percentage change factor to calculate the 2023-24 appropriations limit. Attachment B provides the city and unincorporated county population percentage change. Attachment C provides the population percentage change for counties and their summed incorporated areas. The population percentage change data excludes federal and state institutionalized populations and military populations.
Population Percent Change for Special Districts
Some special districts must establish an annual appropriations limit. California Revenue and Taxation Code section 2228 provides additional information regarding the appropriations limit.
Article XIII B, section 9(C) of the California Constitution exempts certain special districts from the appropriations limit calculation mandate. The code section and the California Constitution can be accessed at the following website: http://leginfo.legislature.ca.gov/faces/codes.xhtml.
Special districts required by law to calculate their appropriations limit must present the calculation as part of their annual audit. Any questions special districts have on this requirement should be directed to their county, district legal counsel, or the law itself. No state agency reviews the local appropriations limits.
Population Certification
The population certification program applies only to cities and counties. California Revenue and Taxation Code section 11005.6 mandates Finance to automatically certify any population estimate that exceeds the current certified population with the State Controller’s Office. Finance will certify the higher estimate to the State Controller by June 1, 2023.
Please Note: The prior year’s city population estimates may be revised. The per capita personal income change is based on historical data.
If you have any questions regarding this data, please contact the Demographic Research Unit at (916) 323-4086.
JOE SPEPHENSHAW
Director
By:
Erika Li
Chief Deputy Director
Attachment
May 2023
Attachment A
A. Price Factor: Article XIII B specifies that local jurisdictions select their cost of living factor to compute their appropriation limit by a vote of their governing body. The cost of living factor provided here is per capita personal income. If the percentage change in per capita personal income is selected, the percentage change to be used in setting the fiscal year 2023-24 appropriation limit is:
Per Capita Personal Income
Fiscal Year Percentage change
(FY) over prior year
2023-24 4.44
B. Following is an example using sample population change and the change in California per capita personal income as growth factors in computing a 2023-24 appropriation limit.
2023-24:
Per Capita Cost of Living Change = 4.44 percent
Population Change = -0.35 percent
Per Capita Cost of Living converted to a ratio: 4.44 + 100 = 1.0444 100
Population converted to a ratio: -0.35 + 100 = 0.9965
100
Calculation of factor for FY 2023-24: 1.0444 x 0.9965 = 1.0407
Fiscal Year 2023-24
Attachment B
Annual Percent Change in Population Minus Exclusions*
January 1, 2022 to January 1, 2023 and Total Population, January 1, 2023 County
City
Percent Change
2022-2023
--- Population Minus Exclusions ---
1-1-22 1-1-23
Total
Population
1-1-2023
South Gate
South Pasadena
Temple City
Torrance
Vernon
-0.78
-0.59
-0.55
-0.88
-0.97
93,355
26,428
36,010
144,327
207
92,628
26,273
35,813
143,057
205
92,628
26,273
35,813
143,057
205
Walnut
West Covina
West Hollywood
Westlake Village
Whittier
Unincorporated
-0.61
0.23 -0.39
-1.12
-0.47
-0.95
27,721
107,642
34,930
8,009
87,707
1,006,954
27,553
107,893
34,793
7,919
87,291
997,407
27,553
107,893
34,793
7,919
87,291
997,999
County Total -0.75 9,826,563 9,753,247 9,761,210
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.
ALTERNATIVE ADJUSTMENT FACTORS
Under Proposition 111, there are two options available for each of the major adjustment factors.
The values of these factors for the purpose of calculating the Gann Limit are as follows:
FY 2022 FY 2023 FY 2024
Price Factors:
(A) Percent growth in State per Capita Personal Income: 5.73% 7.55% 4.44% (Source: California Department of Finance)
Price Factor A 1.057 1.0755 1.0444
(B) Percent change in Assessed Valuation in new
non‐residential construction 27.36 21.82 11.17
(Source: Los Angeles County Assessor's Office)
Price Factor B 1.2736 1.2182 1.1117
Population Factors:
(C) Percentage growth in County Population ‐0.89 ‐0.71 ‐0.75 (Source: California Department of Finance)
Population Factor C 0.9911 0.9929 0.9925
(D) Percent growth in City Population ‐0.67 ‐0.95 ‐0.97 (Source: California Department of Finance)
Population Factor D 0.9933 0.9905 0.9903
Annual Adjustment Factors:
Based upon the actual data, the four alternative adjustment factors are as follows:
A x C 1.047890 1.067864 1.036567
A x D 1.050216 1.065283 1.034269
B x C 1.262265 1.209551 1.103362
B x D 1.265067 1.206627 1.100917
CITY OF VERNON
APPROPRIATION LIMIT UNDER PROPOSITION 4 AND
SECTION 7901 OF THE GOVERNMENT CODE
2023‐2024 APPROPRIATION LIMIT CALCULATION
2022‐2023 Appropriation Limit 2,380,154,189
Increase in Nonresidential Construction 11.17%
Los Angeles County population change ‐0.75 %
1.1117 X 0.9925 = 1.103362 X 1.103362
2023‐2024 Appropriation Limit 2,626,172,281