The California Constitution provides that whenever the State mandates a new program on local governments, the State must reimburse local governments for their increased costs. On June 3, 2014, voters approved Proposition 42, amending the California Constitution to eliminate the obligations of the State to reimburse local governments for costs incurred as a result of the mandates imposed by the Brown Act and Public Records Act.
Background
In 1979, voters approved Proposition 4, the "Spirit of Proposition 13" initiative. Proposition 4 amended the California Constitution, requiring the State to provide reimbursement to local governments for state-imposed mandates. However, in the early 2000s the State began deferring reimbursements to local governments and by 2004, the State owed local governments roughly $1 billion.
In 2004, voters approved Proposition 1A, which authorized the suspension of reimbursements during a budget crisis and also permitted that State to establish a payment plan for what the State already owed. Pursuant to Proposition 1A, the Legislature established a 5-year payment plan for pre-2004 mandates. And in his May Revision, the Governor recently proposed allocating $100 million in the 2014-15 Budget to pay for pre-2004 mandate claims. The State has no plan to pay for post-2004 mandates.
During the two most recent budget years, the Legislature used its Proposition 1A authority to suspend reimbursement provisions of the Brown Act and the Public Records Act. Since the California Constitution requires that the cost of State mandates be reimbursed by the State, the suspension of these provisions had the effect of rendering unenforceable certain portions of the Brown Act and Public Records Act.
Responding to the possibility that some local governments may no longer follow portions of the Public Records Act and Brown Act if the Legislature again suspended reimbursement, the Legislature placed Proposition 42 on the June 3 ballot. Proposition 42 amends the California Constitution, and enshrines the rights and obligations conferred by the Public Records Act and Brown Act. More importantly to local governments, Proposition 42 amends the Constitution so that the State need not provide reimbursement for costs imposed by the Public Records Act and Brown Act. Proposition 42 also provides that the State need not provide reimbursement for mandates imposed by future amendments to either act, or their successor acts.
What This Means To You
For over a decade, local governments in California have not been able to depend on the State to provide reimbursement for State mandates related to the Brown Act and Public Records Act. Proposition 42 removes the constitutional requirement to provide for such reimbursement for the Public Records Act and Brown Act. Moving forward, local governments may receive reimbursement for unpaid pre-2004 claims, but reimbursement for post-2004 claims appears unlikely.
Questions
If you have any questions concerning this Legal Alert, please contact the following from our office, or the attorney with whom you normally consult.
Jeffrey A. Mitchell, Mona G. Ebrahimi, Maggie W. Stern or Anthony D. Bento | 916.321.4500