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BACKGROUND In 1979, the voters passed Proposition 4 (Prop 4) with the intent of limiting government spending. Prop 4 accomplishes this by limiting an agency's ability to keep and spend its tax revenue based on its base year FY1978/79 spending, adjusted annually by an inflation factor and the agency's increase in population. Due to some difficulties with the restrictions of Prop 4, revisions to the adjustment formulas were made through Proposition 111, which was adopted by the voters in June 1990. Proposition 111 also established FY 1986/87 as the new base year. DISCUSSION The factors used to compute the Prop 4 limits are: (1) either the percentage change in California per capita personal income or the percentage change in the local assessment roll from the preceding year due to the addition of local nonresidential construction in the city, and (2) either the city's own population growth or the population growth of the entire county. The State Department of Finance annually provides the California per capita personal income change percentage for purposes of calculating the Prop 4 Spending Limit. For FY 2023/24, California per capita personal income increased by 4.44 percent, which exceeds the 1.93 percentage change in Pleasanton's local assessment roll provided by the Alameda County Assessor's office. The City's population decrease was 1.37 percent while the Alameda County's population decreased by 0.47 percent; therefore, the calculation for the FY 2023/24 Limit is based on the percentage change in California per capita personal income and the county's population decrease. Attachment 2 details the calculation of the Limit for FY 2023/24 of$817,463,288. Submitted by: Approved by: )\rSusan Hsieh Gerry Beaudin Director of Finance City Manager Attachments: 1. Resolution 2. FY 2023/24 Appropriations Limit Calculation Page 2 of 2