41. Prohibits New State Taxes That Exclude Revenues from State Spending Limit
The Question:
Should the state require pre-election and recurring audits of programs funded by new statewide special taxes, and prohibit new state taxes enacted after January 1, 2026 that exclude their revenues from the existing voter-approved state spending limit?
| NOTE: Comment from the impartial Legislative Analyst on Prop 40, 41 and 42
If either Prop 41 or Prop 42 on this ballot receives more Yes votes than Prop 40, then Prop 40 could be stopped from becoming law, even if Prop 40 gets Yes votes from a majority of voters. This is because the courts could find that Propositions 41 or 42 conflict with Proposition 40.
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Background:
Prop 41's initiative was created as a response to Prop 40. Prop 41 contains a 'Conflicting Measures' clause that says, in brief, that if it's on the same statewide ballot as any other initiative proposition that contains a state tax that is exempted from the Government Spending Limitation (e.g. Prop 40), then that other initiative proposition is in conflict with Prop 41, so if Prop 41 gets more Yes votes the other proposition, that other proposition is null and void.
The proposed law for Prop 41 requires that: "No state tax that is enacted or takes effect on or after January 1, 2026, shall be exempted or excluded from the Government Spending Limitation." The Government Spending Limitation is defined in Article XIII B of the California constitution,. It was enacted by voters in 1979 and is commonly known at the the Gann Limit.
Prop 41 is about taxes that:
- are the result of an initiative petition that gets on the ballot (not a law passed by the legislature), and
- are approved in a state-wide election held after January 1, 2026, and
- are designated to only be used to fund specific stated purposes (not general funds), as limited by the Gann Limit or
- are excluded from the Gann Limit
If approved, Prop 41 would add to the responsibilities of the CA State Auditor:
- Pre-Audits of any initiative that meets the criteria above before the initiative could appear on a ballot.
- Audits, at least every four years, of every program funded by special taxes, whether approved by voters or by the Legislature.
Since many of these limitations apply to sections of Prop 40, if Prop 41 passes it would challenge, and possibly nullify, Prop 40.