AgdaPkt 2005-03-14 - Laserfiche WebLink

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� I � I � ANNEXATION from page 1•••�•��•••• THE NEIN VEHICLE LtCENSE FEE: IN�ACT Certain components of this °swap of property ON CIIY INCORPORATION tax for VLF revenues result in negative revenue AND ANNEXATION impacts for new city incorporations and some annexations. Assemblymember John Laird, Chair Vehicle License Fee (VL� revenues are an of the Assembly Budget Committee, has intro- important component of the fiscal viability of duced a spot bill with the intent of addressing this annexations and incorporations. Priorto 2004, issue (AB 1602}. state law required that a city whose population increased by vi�tue of annexing an area would Additionally, the League of California Cities has receive additional VLF revenue to fund services to created a subcommittee under the Revenue and the area. Taxation Policy Committee that is explonng poten- tial options to resolve these financing issues. Additionally, for its first seven years, a newly incorporated city would receive its VLF allocation As a part of these efforts, we'd like to collect based on three times the number of registered some information from cities that are considering, voters at the time of incorporation, a somewhat or are actively involved in annexing land. Please higher figure than actual population. use the form below and send your responses Frances Medema, by Friday March 4"� at e-mail: Although the funds to new city populations in finedemaCa�cacities.orgor fax: (916) 658-8240. annexations and new incorporations were funded from the VLF, these allocations were made pos- ANNEXATION INFORMATION sible without significant fiscal effeets on other cities, because annual growth in the statewide City Name: MVLF account was more than adequate to fund them. The effect of funding these new incorpora- Contact Name/Phone: tions and allocations was an imperceptibly smaller level of growth in VLF for cities throughout the 1. Does your city anticipate annexations state. County VLF revenues are allocated from a within the next: statewide share for counties based on countywide a. Year? Yes No population whether incorporated or not. Conse- b. 1— 3 Years? Yes No quently, when a city incorporates or annexes c. 3— 5 Years? Yes No territory, the county's VLF revenue is not affected. d. Over 5 Years? Yes No _ With the VLF for Property Tax Slivap of 2004, 1. If yes, please tell us: o a. Annexations involving uninhabited` land: more than 90 /o of city VLF (and VLF backfill) acres approximate revenue has been replaced with property tax assessed value revenue. But in the closing days of the 2004 budget negotiations, changes were made that b. Annexations involving inh=abited land: severely reduce the amount to VLF revenue acres approximate available to go to annexations and new incorpora- population approximate assessed tions in the future. These changes are described value in greater detail in League fiscal consultant *i.e., no residential dwellings. Michael Coleman's report, The VLF for Property Tax Swap of 2004: Problems fvr Annexations and In the meaMime, iYs important that cities New Incorporations, available on-line at understand the issues pertinent to their growth �•CalifomiaCityFinance.com. plans that result from the VLF/Property Tax swap. A description is contained in °The New Vehicle Continued on Page 6 License Fee: Impact on New City Incorporation and Annexation". Visit the League's Official Web Site--www.cacities.org PRIORITY FOCUS/PAGE 5