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8A Page 13 'Senate Budget Committee' Continued from Page 1... Ontario City Manager Greg Devereaux and League Deputy Executive Director Dwight Stenbakken represented cities. They provided suggestions for improving the fiscal relationship between the state and city government in California. These include: . Infrastructure Funding: This is a critical area of concern for cities when focusing on the urban development of local communities. Without proper financial tools to support infrastructure for urban development, cities will not be able to properly meet density and transit-oriented development goals under green house gas reduction legis/ation. The following was recommended: o The two-thirds voting threshold for local government general obligation bonds should be lowered to a majority vote, the same threshold for state general obligation bonds, or, if unachievable, a 55 percent voter approval threshold, the same threshold now in law for school capital bonds; and . o Lower the two-thirds voting threshold for countywide transportation votes. A number of such county votes have considerable voter support, but fail with voter support in the low 60th percentiles. . Re-examine the Sales Tax Base: The state and local government tax base for sales taxes should be broadened. The sales tax base has been considerably narrowed over the years with legislatively enacted sales tax exemptions or erosion through decisions made by the Board of Equalization (BOE). As a result, the narrow base makes the sales tax more vulnerable than it has to be and it is a tax that is growing in disparity from the economic realities of a 21 st century economy. Expanding the base of the sales tax would begin to meet these problems. . Stability Is Key in Any Proposal: Whatever direction that the Committee and ultimately the legislature and Governor take to reformlrebuildlremake the state and local fiscal relationship, stability is a key principle for local government. The stability afforded local governments in Proposition 1A (2004) gives local government the ability to plan public services in a more rational and effective manner. Without this stability, local governments will again be forced to look over their shoulder every time the state budget is in a deficit situation. . Redevelopment is an Important Financial Tool: The Committee was reminded that redevelopment is one of the more important tools for financing infrastructure, necessary to meet state goars relating to low and moderate income housing as well as transit- oriented development. Without redevelopment, there would have to be a substitute revenue source to address these priority infrastructure issues. The counties were represented by two county Chief Administrative Officers (CAOs), one current and one retired. They focused on the many state programs run/administered by counties. Behind this discussion is the motivation for the state to explore opportunities for program "realignments. that shift state programs to counties presumably along with the revenue to adequately cover the cost. While there have been some successes in program realignment in the past, counties are always cautious that realignment proposals don't assign considerable new responsibilities to counties and fall short on proper funding. They also shared a perspective of some county officials that redevelopment agencies in cities negatively impact state and county finance. Next Step Sen. Denise Ducheny (D-San Diego), Budget Committee chair, announced that the Committee would like proposals to be submitted before the next full Committee hearing. This hearing is scheduled for Thursday, April 24. The timing will allow Committee members time to vet any proposals and work on any Committee projects before Gov. Arnold Schwarzenegger's May Budget Revise. 2