This measure would establish a two-year state budget cycle (currently the cycle is one year), which would begin in 2015. It would prevent the Legislature from creating expenditures of more than $25 million unless compensating income or spending cuts are identified and would permit the governor to cut the budget if the Legislature fails to act within 45 days of a declared fiscal emergency.

According to the legislative analyst, Proposition 31 would restrict the Legislature’s ability to increase state costs or decrease state revenues. Specifically, the Legislature would have to show how bills that increase state spending or decrease state revenues in excess of $25 million in any fiscal year would be offset by spending cuts, tax increases, or a combination of both. Thus, if the Legislature wanted to pass a bill that creates a new program (or reduces a tax), and the cost of that program (or tax cut) is more than $25 million in any fiscal year, the Legislature would have to cut other programs or increase taxes to pay for the bill. The concept is generally referred to as “pay-as-you-go” budgeting.

The measure would also require a performance review of all state programs, and (the establishment) of performance goals in the state and local budgets. Publication of bills would be required three days prior to a legislative vote, and local governments would be allowed to change how laws governing a state-funded program apply to them, unless vetoed within 60 days by the Legislature or state agency.

Supported by Cruz Renoso, a former California Supreme Court Justice (ret.), Delain Eastin, a former Superintendent of Public Instruction, and the Republican Party, the arguments in favor of Prop. 31 state it would increase public input and stop the state from passing budgets without a public review and require the state government to make available the proposed state budget for public review for a minimum of three days before the legislation votes on it. It would increase funds back to local government and provide cities, counties and school districts more authority to meet local needs.

According to rebuttals submitted to the legislative analyst by the opposition, this proposition would create complicated new rules and restrictions, making the government more cumbersome, expensive, slower to act, and therefore, less effective. The measure also would allow local governments to alter state laws they don’t like which could include laws concerning education, environmental protections, public health issues, and other safety measures in favor of experimental county and local programs. The main opposition to Prop. 31 comes from the California Democratic Party.