AgdaPkt 2004-08-23 - Laserfiche WebLink

Browse Search

1A-1 REPORT To the Honorable Mayor and City Council From the City Manager August23,2004 Subject Resolution supporting Proposition 1A, "Protection of Local Government Revenues," a ballot initiative on the November 2, 2004 statewide ballot to restrict the State legislature's ability to take local government funding Recommendation Adopt a resolution supporting Proposition 1A on the November 2,2004 statewide ballot Background In recent years, the State legislature and previous governors have approved laws that divert local tax revenues away from local governments. Most recently, the State's budget crisis has prompted the legislature to dig even further into local revenues in order to help offset the State's budget deficit. Redwood City's "hit" forthis fiscal year amounted to about $6.5 million, accounting for fully two-thirds of the City's deficit. This trend toward further confiscation of local tax revenues (that local governments use to provide essential services such as police and fire protection, emergency and public health care, roads, parks, libraries, and water delivery), extends back for more than a decade. Since 1991, the State has taken an estimated $40 billion of local property taxes from cities, counties, and special districts. In just the last fiscal year, cities alone lost $800 million of local funds in this manner, and nearly $7 billion over the last 12 years. Remarkably, even in years of a State budget surplus, the State has continued to take these funds and use them to finance its constitutional funding obligation to education, thus allowing the State to increase State general fund spending for other State programs. It's abundantly clear that the State/local fiscal system is broken, and there has been a lack of any effort by the legislature to address this worsening problem. In response to this inaction, earlier this year the League of California Cities took the lead in sponsoring a ballot initiative entitled the "Local Taxpayers and Public Safety Protection Act." That measure would require voter approval prior to the legislature taking further local funds. Sufficient signatures were gathered, and the measure was placed on the November 2004 ballot as Proposition 65. That initiative got the attention of the legislature, and as part of the recently-adopted State budget, a bipartisan agreement was reached to create a mechanism, Proposition 1A (based on the bill SCA 4) by which the legislature is constitutionally restricted from taking local funding, in return for an additional two years of continued cuts to local funding by the State. ...-....-'......- - - .- ._.. .........-y--. ......-....-....