Proposition 41: Prohibits New State Taxes That Exclude Revenues from State Spending Limit.

Presented by Mona Field, LWV of Greater Los Angeles Proposition 41: Prohibits New State Taxes That Exclude Revenues from State Spending Limit. Requires Audits for New State Special Taxes Proposition 41 is an initiative constitutional amendment on California’s November 3, 2026 ballot. It would require new state special taxes taking effect after January 1, 2026 to be subject to California’s constitutional state spending limit, commonly known as the Gann Limit. It would also establish new audit requirements for programs funded by new or increased special taxes. For voter initiatives proposing a new or increased special tax, the State Auditor would conduct a financial and performance audit after proponents report collecting 25% of the signatures needed to qualify for the ballot. If the initiative qualifies, a summary of the audit would appear in the state Voter Information Guide. Programs funded by special taxes enacted or increased after January 1, 2026 would also be audited every four years. Proposition 41 also interacts with Proposition 40, the one-time tax on certain taxpayers with more than $1 billion in assets. Proposition 40 excludes its revenues from the state spending limit. If both measures pass and Proposition 41 receives more YES votes, courts could determine that the measures conflict and that Proposition 41 prevents Proposition 40 from taking effect. Arguments in favor: Supporters say Proposition 41 would increase transparency and accountability by requiring independent public audits of programs funded by new special taxes. They argue that voters should receive information about program performance before approving new taxes and that new tax revenues should remain subject to California’s existing spending limit. Arguments against: Opponents say Proposition 41 would restrict the state’s ability to use revenues from new taxes for their intended purposes and could make it more difficult to fund public programs when the state approaches its spending limit. They also object to its potential effect on Proposition 40 and argue that the audit requirements would create additional state costs. The Legislative Analyst says the overall fiscal effect is unknown because it depends on future decisions by voters and policymakers. Pre-election audits of initiatives that do not qualify or are rejected by voters could cost the General Fund in the low millions of dollars over a two-year election cycle. Audit costs for approved special taxes generally would be paid from those tax revenues. A YES vote means new state special taxes generally could not exclude their revenues from the state spending limit, and new audit requirements would apply to programs funded by new or increased special taxes. A NO vote keeps the current state spending-limit and State Auditor requirements in place. California Voter Information Guide For the complete nonpartisan Pros & Cons analysis from the League of Women Voters of California Education Fund: Proposition 41 — LWV California Education Fund Pros & Cons: https://cavotes.org/ballot-measure/20... For the official state voter guide: California Official Voter Information Guide — Proposition 41: https://voterguide.sos.ca.gov/proposi... More information: Donate to the League of Women Voters of Los Angeles County: https://www.paypal.com/ncp/payment/MB... League of Women Voters of Los Angeles County: https://lwvlacounty.org Los Angeles County Registrar-Recorder/County Clerk election information: https://www.lavote.gov/home/voting-el... Vote 411: https://www.vote411.org USE OF THIS VIDEO: This presentation was produced by the League of Women Voters of Los Angeles County for voter education. If reproduced, shared, embedded, or rebroadcast, the video must be presented in its entirety and may not be edited, excerpted, clipped, altered, or used in a manner that could misrepresent the content or the League’s presentation. Unauthorized use of excerpts or edited portions is not approved by the League of Women Voters of Los Angeles County. For permission requests, please contact the League directly.