House Bill No. 295 proposes a constitutional amendment to establish a Government Growth Limit that will restrict the amount of recurring revenue from the State General Fund (Direct) that the legislature can appropriate for recurring expenses in any fiscal year, starting with the 2027-2028 Fiscal Year. The bill outlines that the Revenue Estimating Conference will determine this limit, which must be calculated no later than the first quarter of the calendar year preceding the fiscal year. Additionally, any recurring revenue recognized above this limit and below the existing expenditure limit can only be appropriated for nonrecurring expenses, defined as those not expected to recur in the same amounts each year. The amendment also allows for exceptions to this rule and stipulates that the Government Growth Limit can be altered by a two-thirds vote of the legislature under specific conditions.

The bill retains existing provisions that prohibit appropriations from exceeding the official forecast at the time of appropriation and requires that the governor's proposed budget comply with both the expenditure limit and the new growth limit. The initial Government Growth Limit for the 2027-2028 Fiscal Year is set to be the total appropriations for recurring expenses from the previous fiscal year, plus an additional three percent. The proposed amendment will be submitted to voters for approval in a statewide election scheduled for November 3, 2026.