AgdaPkt 2002-02-04 - Laserfiche WebLink

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IREPOR T Tothe Honorable Mayor and City Council From the City Manager February 4, 2002 Subject Opposition to Assembly Bill 680 Recommendation Approve the attached resolution opposing Assembly Bill 680 Background Assembly Bill 680, authored by Assemblyman Darrell Steinberg (D - Sacramento), would redistribute a certain portion of sales tax growth within the greater Sacramento region based on whether a jurisdiction in that region fulfills specified criteria related to 'smart growth' projects, as defined. This bill is of state-wide interest as it is acknowledged as a pilot program and may set a precedent for the rest of California. This bill has passed the Assembly Appropriations Committee and as of this writing is pending before the full Assembly, for action by January 31. If enacted, affected cities and counties would continue to retain their current (2002) shares of the local sales tax, which are distributed according to the point of sale. However, this bill would divide any future growth in that sales tax revenue three ways: ~ One-third still going to the city/county of point of sale; ~ One-third distributed on a per-capita basis among all jurisdictions within the region; ~, One-third dependent on whether a local jurisdiction has complied with the bill's 'smart growth' requirements. The 'smart growth' requirements are associated with a jurisdiction's provision of affordable housing for Iow and very Iow income residents, adoption of a suitable mixed-income housing ordinance, provision of year-round services and/or shelters for the homeless, and other similar projects. Jurisdictions that have not met the criteria would not receive that one-third share of the sales tax growth. Instead, this amount would be allocated to the Sacramento Area Council of Governments (SACOG) for the funding of qualifying 'smart growth' projects, upon an application and approval process, by any jurisdiction within that region. Staff recommends an 'oppose' position on this legislation for a number of compelling reasons. Sales tax, in the post-Proposition 13' era and particularly after the property tax reallocation of the early 1990s, is the primary source of revenue for cities. In Redwood City, sales tax represents approximately 30.1 percent of overall revenues. It would not be prudent, especially in light of the current economic situation, to support any measure which would threaten this source of funds.