Legislative Power to Control Local Budgetary Decisions In California

Is the Legislature Empowered to Direct or Control Local Budgetry Decisions Except When It Allocates Funds on a Pro Rata Basis ? In Amador Valley Joint Union High Sch. Dist. v. State Bd. of Equalization (1978) 22 Cal. 3d 208, 220 149 Cal. Rptr. 239, 583 P.2d 1281, the court upheld Proposition 13 and the vesting in the Legislature of the general power to allocate revenues from local property taxes. (22 Cal. 3d at pp. 225-226.) The court noted that the Legislature was not thereby empowered to reward or punish local agencies and thereby undermine local power to address regional issues by withholding funds. The court explained that Proposition 13 did not empower the state to "direct or control local budgetary decisions or program or service priorities . . ." or otherwise interfere with local decisionmaking. (22 Cal. 3d at p. 226.) However, the Amador Valley court specifically stated that legislation that merely allocates funds on a pro rata basis, without imposing conditions on the local entity's use of the funds is a valid exercise of the state's authority under Proposition 13. (22 Cal. 3d at p. 227.) In Amador, the court upheld Proposition 13 against a claimed impairment of home rule. The court recognized that a limitation on the ability to levy taxes had a limiting effect on home rule, but stated that nothing in the proposition abrogates home rule "or discloses any intent to undermine or subordinate preexisting constitutional provisions on that subject . . . ." (22 Cal. 3d at p. 225.) The key reason that the court found that home rule was not improperly infringed was that the funds at issue in that case were allocated to local agencies on a pro rata basis, "without imposing any condition whatever regarding their ultimate use." ( Id. at p. 227.)