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9 .A~ }& ACA 9 from page 1 ................................................ ...J VLF fees could be lowered below their Why SUDDort the OriGinal Aareement? current constitutionally determined values, with no backfill requirements. It has the support of the Administration. ...J Bradley-Bums sales tax revenues could . be reduced and the authority to raise It has the fully support of local govern- sales tax would be shifted to the state . (similar to the "triple-flip"). ment. . Redevelopment Agencies are left unpro- . It has been fully vetted for well over two tected from future ERAF shifts. months. There was no guarantee for VLF gap loan . It is not a last-minute proposal riddled with . repayment. errors and unintended consequences. . Reconfigures the allocation of cuts to As noted above, the final chapter on this story special districts, shifting part of the cuts to has yet to be written. Updated information will be city and county dependent special districts. provided in the days ahead on the league's website, www.cacities.org. . VLF sales for property tax "swap" leaves local revenues unprotected. WHAT'S IN THE ORIGINAL AGREEMENT? By mid-day the governor's office had issued the following press statement reiterating his support for . VlF ReductionlNew Property Taxes to the Local Government Agreement he had negoti- Cities. Lower the VLF to 0.65% from 2%. and ated in May with the lOCAl coalition: provides property taxes to cities and counties to offset VLF backfill (less $700 million for 2 years- "Six weeks ago I stood proudly with the leaders $350 million city and $350 million county). With of local government in Califomia to announce that this swap, cities, beginning in 2006-07 will have we had come to agreement on a plan for them to more property tax than sales in the mix of rev- contribute $1.3 billion to the state's general fund enues for the first time since before Proposition during this fiscal crisis, for assurances that the 13. state will never be able to raid their coffers again. VLF Repayment. Requires repayment in . "We are now two days into the new fiscal year 2006-07 of 2003-04 VLF Backfill Loan ($520 without a budget. Passing the local government million back to cities). agreement that " along with Democrat and Republi- . No Future Tax Raids. Protects city and can local officials throughout the state, support is county revenues from future revenue shifts of the the right solution to the current budget debate. I property tax, sales tax, and the remaining VLF. urge the legislature to pass this plan quickly. " . Mandate Reimbursements. Requires The League also remains in full support of the payment of deferred mandate reimbursements to original agreement made with the administration on local government, beginning in 2006-07. a local government finance package. This proposal gives the legislature $2.6 billion in local government . Suspension of Mandates. Requires that revenue over the next two years to support state failure to pay mandate reimbursements in timely programs in exchange for a November ballot way will trigger a suspension of law imposing measure to constitutionally protect local revenues mandate. in the future. Continued on Palle 7 PAGE &/PRIORITY FOCUS Visit the League's Official Web Site-.www.cacities.org .