While attacking the spending limit for being too weak, “Anti-Tax Advocates” seem to have created their own confusion over spending limits. After weeks of denigrating Proposition 1A, even though it uses the venerable Gann Limit factors (population plus CPI) to limit revenue growth to control the revenues from the rainy day fund when needed, the advocates have suddenly scrambled to concoct an alternative to the so-called hard cap of population and CPI growth.
As stated in these pages last week, and reported again over the weekend, anti-tax advocates would prefer to limit spending not based on the Gann factors, but based on GDP growth. But, as the chart below shows, after 20 years spending under such a plan, the limit would have been $13 billion HIGHER than under the Gann Limit. No wonder the public employee unions have joined forces with them to oppose Proposition 1A.
State Government Growth: GDP Limit vs Gann Limit