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� � lULY 9 FRAMEWORK (LOCAL COALITIOH APPROVED) Constitutional Protsction • No mor�e than two loans may occur during any ten-year period, and new loans are prohibited until � VLF-after reduction of rate to 0.6596: earlier loans have been repaid. • VLF-Property Tax Backfill Exchange. • Repayment is constitutionaliy Exchange $4.1 billion in VLF backfill for a compa- guaranteed so local govemments rable amount of property tax on a dollar for dollar �n borrow against it. basis. Backfill. Constitutionally provide equivalent in property tax backfill if rate reduced or credit/ `� Voluntary Revenue Exchanges. Specifi- offset given without reducing rate. ��N retain authority for the legislature to approve VLF Gap Loan. Constitutionally guarantee the exchange of local sales tax for an equal repayment of VLF Gap Loan in 2006-07. amount of property tax on a purely voluntary or local-option basis. Any type of voluntary revenue �1 Sales Tax-explicitly protect the rate and method exchange agreement must be revenue-neutral. of distribution of Bradley-Bums and other local � Automatic Sus sales taxes. (Includes sales tax growth). pension of Unfunded Triple Flip Guarantee. Guarantee retum Mandates. Require annual reimbursement of of 1/4 cent sales tax to cities and counties when local governments for state mandated programs Prop. 57 bonds retired. or the mandate is suspended, except for specified employee rights and benefits. • Payment of Deferred Mandates. � Property Tax-Protect the proportionate shares Statutorily commit to repayment of deferred (includes growth) of property taxes of cities, counties and special districts and the redevelop- mandates (est. $2 billion) over three year ment tax increment. period, beginning in 2006-07. • Redevelopment. Provide explicit protec- . . . . . . . . . . . . . . . . . . . .. . . . . . tion of existing and future redevelopment incre- 7/2y ment (treat as local agency for this purpose only) . • Triple Flip Backfill. Guarantee property KEY pRpgLEMS WITH SCA 9 tax backfill for'/. cent sales tax used in triple flip. �j� RLAKS0111) • Loan of Property Taxes in Fiscal Emer- gencies. Beginning in 2008-09, after issuance of a proclamation of fiscal emergency by the gover- . State Legislature can reallocate all of a local nor and approval by the legislature of a separate urgency bill by a supermajority vote (e.g., 3/4 or 4/ 9overnment's property tax. w 5), the state may borrow local property taxes SCA 9 only protects the aggregate revenue under the following conditions: within each county, but allows reallocation of VLF Gap loan has been repaid, and Property tax among local jurisdictions within each • payments on deferred mandates �unty. The July 9 compromise would protect are on schedule for repayment in each jurisdiction s individual property tax. three years, beginning 2006-07. . SCA 9 does not contain a cap on local funds • Sums must be repaid with interest that can be borrowed. A cap is necessary to (PMIB rate) within three years. place a limit on the amount of local revenues that • No more than a total of $1 billion �n be taken at any given time. LOCAL's July 9 (or an equivalent °�6 of the total compromise framework limits the amount the property tax) may be borrowed at State could borrow to $1 billion at a time and no any time. more than two loans could occur during any ten- year period. Continued on Page 6 Visit the League's Official Web Site--www.cacities.org PRIORITY FOCUS/PAGE 5 , . . .. ___._. . _ _. __.. _ ,