Slide 34 of 84
The revenue limit is calculated as a percentage of personal income in the state. Personal income is probably the single best measure of the dollar value of economic activity. The revenue limitation says that the state may not collect a greater percentage of personal income in revenue in years after the approval of the amendment than it did in the base year. That percentage is 9.49 percent. The percentage cannot be found in the constitution, it was calculated later on and it is now a part of budget law. The percentage did not change when Proposal A passed, even though when Proposal A passed the state started collecting more tax revenue in exchange for reducing local taxes. But the revenue limit stayed at 9.5 percent.
If revenues in excess of the limit occur, the money goes into the budget stabilization fund or it may refunded to taxpayers. If the excess exceeds 2%, it must be repaid to taxpayers.