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AB 680 Assembly Bill- BiilAnalysis ~ · 1)Local Sales Tax Allocation The bill would affect allocation of about $24 million of sales tax revenue in the greater Sacramento region annually, beginning in 2003· {This numar would grow by about 5 percent annually). Cities and counties would continue to receive one-third of this amount on situs basis, as under current law, and an additional one-thirds of this amount if they meet the criteria to be "housing eligible." The per capita allocation of the remaining one-third would benefit the most heavily populated cities within the region. Smaller cities and unincorporated regions that are home to "big box" retailers or shopping malls generally would lose revenue, relative to a situs allocation. _2)State Gasoline Sales Tax Allocation Contingent upon voter approval of Proposition 42, the bill would allocate one percent of the state sales tax on gasoline, which presently generates about $1.6 billion annually, to any multicounty region that adopts regional tax sharing agreements or smart growth principles. COMMENTS .' 1)Rationale The reductions in local property tax revenues due to Proposition 13 and the state ERAF shifts have led many co~nunities to base land use decisions on the amount of sales tax revenue that will be generated by the proposed use. As a result, co,unities have chased retail developments and contributed to the problems of urban sprawl and traffic congestion. By making communities less dependent on sales tax revenues and providing incentives for conununities to meet their housing and transportation needs, the bill seeks to restore balance to local land use planning. 2)Support Supporters, including the cities of Sacramento, Citrus Heights, Davis, and Sacramento County, believe that the current formula for distributing the local sales tax does not adequately reflect the impact of local land use decisions on regional quality of life issues, including transportation, air quality, loss of open space and the supply of affordable housing. Supporters note that by allowing cities and counties to keep their current sales tax bases, AB 680 does not punish AB 680 Page 4 communities for their prior retail development decisions, and therefore is a moderate step forward. 3)Opposition . Opponents include the California League of Cities, the individual cities of West Sacramento, Woodland, http://info.sen.ca.gov/pub/bill/asm/ab_O651'O700/ab 680 cfa 20020125_163947_asm_co... 1/29/2002