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cf'A- £; Continued from Page 1 - League Applauds Budget Agreement... One day later, the budget was passed by the Senate (34-4) and the Assembly (64-13), and sent to the governor for his signature. Both houses also passed the budget trailer bills. The League staff is reviewing both the budget and trailer bills to examine the details in the final language (see "The Fine Print... ft for some key items for cities). You can review the full text of the bills online at www.cacities.orQ. The bills are: Senate Bill (SB) 77 - Budget Bill, Assembly Bill (AB) 131 - Health Omnibus. AB 138- Mandates, AB 139 - General Government, AB 141 - Hydrogen Highway/PIER, AB 145 - Uniform Civil Filing Fees, AB 146 - Budget Revisions, SB 62 - Transportation, SB 63 - Education, SB 64 - Boards and Commissions, SB 68 - Social Services Omnibus, SB 71 - Resources Omnibus, While the return of Prop. 42 funding was expected - the governor had proposed it his May budget revision and the Legislature adopted it in the budget subcommittee - the VLF gap loan repayment in full was a big surprise. The governor had proposed an early repayment of half the loan amount, but the funding was not included in the budget package adopted by the conference committee. The League joined with the California State Association of Counties (CSAC) in applauding the budget agreement as one that keeps faith with California voters and repays much-needed funds to California communities (for more information, see the Joint Press Release on the League's web site - www.cacities.org). Proposition 1A, the League- and local government-sponsored constitutional amendment passed by almost 84 percent of California voters in November 2004, limited the state's ability to take or borrow local funds. The measure sent a clear signal that voters wanted local funds preserved to pay for local services. Proposition 42 was passed in 2002 by 69 percent of statewide voters. It dedicated the sales tax on gasoline to transportation projects, including repair and maintenance of local streets and roads. But it allowed the state to shift funding to the state general fund during times of state fiscal stress. FY 2005-06 will mark. the first time since Prop. 42 passed that the $1.3 billion sales tax on gas will be spent on transportation. Cities and counties will receive $254 million of that amount for local street and road maintenance projects ($126.5 million for cities). For city-by-city Prop. 42 funding information, see the League's web site - www.cacities.org. Full VLF Gap Loan Repayment a Welcome Surprise City and county officials throughout the state greeted the news that full repayment of the VLF gap loan would come one year early with surprise and enthusiasm. "This is a win-win for the state and local governments," said League of California Cities President Pat Eklund, who is also a council member of the city of Novato. "It's a savings for taxpayers because it wipes this debt off the state books and it provides funds for important local services like law enforcement, firefighting and vital health services." Visit the League's web site to view city-by-city VLF gap loan amounts. We have not yet been able to determine when the state will process the loan repayment, but will provide this information as soon as it is available. The timing is particularly critical for cities and counties that were considering securitization of their share of the gap loan by selling it to investors. (For details, see "Early Repayment of VLF Gap Loan: A Welcome Surprise for All Citiesft). 2 - 1r