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<br />8e <br />Page 1 <br /> <br />t. : ~~ LEAGUE <br />~~ OF CALIFORNIA <br />~CITIES <br /> <br />1400 K Street, Suite 400. Sacramento, California 95814 <br />Phone: 916.658.8200 Fax: 916.658.8240 <br />www.cacities.org <br /> <br />DATE: <br /> <br />City Omcials <br />Chris McKenzie, Executive Director <br />Sample Resolution Declaring Severe Fiscal Hardship <br />Friday, May 08, 2009 <br /> <br />TO: <br />FROM: <br /> <br />RE: <br /> <br />Background. On May 5 the Department of Finance announced it had proposed to the <br />Governor that the state "borrow" over $2 billion in local property taxes from cities, <br />counties and special districts to balance the state budget, causing deeper cuts in local <br />public safety and other vital service. In order to start that process, the Governor would <br />have to issue a proclamation declaring the existence of a "severe fiscal hardship." The <br />legislature would then have to implement the "borrowing" program by passing urgency <br />legislation (2/3 vote) which identifies how the "loan" will be repaid with interest. <br /> <br />Resolution. The League has developed the attached Resolution Finding A Severe <br />Fiscal Hardship Win Exist if this proposed state property tax raid is added to the <br />pressures of the ongoing property tax losses and the serious revenue losses' due to the <br />economic recession. The resolution in effect states that the idea of the state taking <br />property tax funds from already stressed city budgets is ludicrous and irresponsible. It <br />helps demonstrate that part of the reason cities are cutting there budgets today, in fact, is <br />because of past and continuing property tax raids. If possible, we urge that a staff report <br />be prepared with information on property tax losses (see below) and budget cuts the city <br />has made and is facing. <br /> <br />Cumulative Property Tax Losses. The attached resolution cites the cumulative property <br />tax losses of cities statewide since the state began taking these funds in the early 199Os- <br />which is $8.6 billion statewide even after deducting payments cities receive from the <br />Prop. 172 public safety sales tax the state COPS grant program. If you want to see your <br />individual city total, see: htto:l/www.ca1ifomiacitvfinance.comJERAFbyCity08.~f. <br />Please use the figure in the last column on the right if you want to insert the amount your <br />city has lost to these state raids. <br /> <br />Where to Send Copies. The draft resolution directs the city clerk to send copies to your <br />legislators, the Governor, and the League. We would appreciate you faxing copies to both <br />your League Regional Public Affairs Manager and the.League's Sacramento Office (Fax <br />916-658-8240). <br /> <br />Note. The last WHEREAS clause was included on the advice of bond counsel to avoid <br />any implication that the city would not honor any 'of its bond or other contractual <br />obligations. <br /> <br />Questions. If you have any questions or need any information please contact your <br />League Regional Public Affairs Manager. <br />