SJR 20 (LSB 1635SV (2) 88)

SENATE JOINT RESOLUTION 20

BY  COMMITTEE ON APPROPRIATIONS

(SUCCESSOR TO SJR 2)

SENATE JOINT RESOLUTION

A Joint Resolution proposing an amendment to the Constitution of the State of Iowa relating to the state budget by creating a state general fund expenditure limitation.

BE IT RESOLVED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  The following amendment to the Constitution of the State of Iowa is proposed:
   The Constitution of the State of Iowa is amended by adding the following new section to a new Article:

ARTICLE _____.
EXPENDITURE LIMITATION.

   Section 1.  General fund expenditure limitation.
   1.  For the purposes of this section:
   a.  “Adjusted revenue estimate” means the most recent revenue estimate determined before January 1, or a later and lower revenue estimate determined before adjournment of the regular session of the general assembly, for the general fund for the following fiscal year, as determined by the revenue estimating conference, adjusted by subtracting estimated refunds payable from that estimated revenue. However, if the state general fund expenditure limitation is calculated based upon the adjusted revenue estimate and not based upon the net revenue estimate and the general assembly holds an extraordinary session prior to the commencement of the fiscal year to which the adjusted revenue estimate applies and if before or during the extraordinary session the revenue estimating conference determines a lower revenue estimate, the lower estimate shall be used for calculating the adjusted revenue estimate.
   b.  “Current fiscal year” means the fiscal year preceding the fiscal year to which the state general fund expenditure limitation applies.
   c.  “General fund” means the principal operating fund of the state.
   d.  “Net revenue estimate” means the most recent revenue estimate determined before January 1, or a later and lower estimate determined before adjournment of the regular session of the general assembly, for the general fund for the current fiscal year, as determined by the revenue estimating conference, and adjusted by subtracting estimated refunds payable from that estimated revenue. However, if the state general fund expenditure limitation is calculated based upon the net revenue estimate and not based upon the adjusted revenue estimate and the general assembly holds an extraordinary session prior to the completion of the fiscal year to which the net revenue estimate applies and if before or during the extraordinary session the revenue estimating conference determines a lower revenue estimate for the current fiscal year, the lower estimate shall be used for calculating the net revenue estimate for the general fund.
   e.  “New revenue” means moneys received by the general fund due to increased tax rates or fees or newly created taxes or fees over and above those moneys received by the general fund due to state taxes or fees in effect as of January 1 following the most recent meeting of the revenue estimating conference. “New revenue” also includes moneys received by the general fund due to new transfers to the general fund over and above those moneys received by the general fund due to transfers in effect as of January 1 following the most recent meeting of the revenue estimating conference.
   2.  A state general fund expenditure limitation is created, as calculated in subsection 3, for each fiscal year beginning on or after July 1 following ratification by the voters of this amendment to the Constitution of the State of Iowa.
   3.  The state general fund expenditure limitation for a fiscal year shall be the lesser of the following amounts:
   a.  Ninety-nine percent of the adjusted revenue estimate for the following fiscal year for the general fund.
   b.  One hundred four percent of the current fiscal year net revenue estimate for the general fund.
   4.  The state general fund expenditure limitation shall be used by the governor in the preparation and approval of the budget and by the general assembly in the budget process.
   5.  If a new revenue source is proposed, the budget revenue projection used for that new revenue source for the period beginning on the effective date of the new revenue source and ending in the fiscal year in which that source is included in the adjusted revenue estimate or the net revenue estimate, as applicable, shall be ninety-five percent of the amount remaining after subtracting estimated refunds payable from the projected revenue from that source.
   6.  If a revenue decrease is proposed, the projection for the revenue source used for that revenue decrease for the period beginning on the effective date of the revenue decrease and ending in the fiscal year in which that decrease is included in the adjusted revenue estimate or the net revenue estimate, as applicable, shall be one hundred percent of the amount of the projected revenue decrease from that source.
   7.  The scope of the state general fund expenditure limitation calculated in accordance with this section shall not include federal funds, donations, constitutionally dedicated moneys, and moneys expended from a state retirement system.
   8.  The governor shall submit and the general assembly shall pass a budget which does not exceed the state general fund expenditure limitation. The governor shall not approve or disapprove appropriation bills or items of appropriation bills passed by the general assembly in a manner that would cause the final appropriations approved by the governor to exceed the state general fund expenditure limitation.
   9.  The governor shall not submit and the general assembly shall not pass a budget which in order to balance assumes reversion of any part of the total of the appropriations included in the budget.
   10.  The general assembly shall establish by law a general fund of the state and a revenue estimating conference. The general assembly shall enact laws to implement this section.
   11.  The general assembly may suspend the application of this article by passage of a joint resolution, subject to approval by the governor, by two-thirds of the members elected to each house of the general assembly.
    Sec. 2.
  REFERRAL AND PUBLICATION.
  The foregoing amendment to the Constitution of the State of Iowa is referred to the general assembly to be chosen at the next general election for members of the general assembly, and shall be published as provided by law for three consecutive months previous to the date of that election.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This joint resolution proposes an amendment to the Constitution of the State of Iowa establishing a new Article that relates to the state budget by creating a constitutionally required state general fund expenditure limitation.
   The expenditure limitation is the lesser of 99 percent of the adjusted revenue estimate for the general fund for the following fiscal year or 104 percent of the net revenue estimate for the general fund for the current fiscal year. The amendment defines “adjusted revenue estimate” and “net revenue estimate” and requires that the estimates be determined by a revenue estimating conference, which is required to be established by the general assembly by law. The amendment requires the expenditure limitation to be used by the governor in preparation of the governor’s budget and by the general assembly in the budget process, and requires the governor to submit, and the general assembly to pass, a budget that does not exceed the expenditure limitation. The amendment prohibits the governor from approving or disapproving of appropriations in a manner that would cause the final budget approved by the governor to exceed the expenditure limitation.
   If a new revenue source is proposed, 95 percent of the estimate of that new revenue, less the estimated refunds payable, shall be included in the revenue estimate used to calculate the expenditure limitation. If a new revenue decrease is proposed, 100 percent of the estimate of that revenue decrease shall be included in the revenue estimate used to calculate the expenditure limitation.
   The amendment authorizes the general assembly to suspend the application of the expenditure limitation by passage of a joint resolution, subject to approval by the governor, by two-thirds of the members elected to each house of the general assembly.
   The joint resolution, if adopted, will be referred to the next general assembly for adoption a second time in identical form before being submitted to the electorate for ratification.