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8.A - 19 VLF from page 1 ................... MGELIDES from page 1............ . The legal opinion states in part: "It is our opinion that the availability' of sufficient General Fund moneys to fund the VLF offset requires an examination of several factors consisting primarily of budgetary considerations, and, secondarily, the availability of General Fund cash." The opinion suggests looking at the state's cash position after the April tax receipts are received, and the May revision budget data is available. It excludes from the definition of sufficient funds consideration of any proceeds of General Fund borrowing which will not be repaid in the fiscal year in which the borrowing occurred. In press reports, Assembly Speaker Wesson stated, "...given our circumstances, I believe it (VLF Trigger) will be pulled." The Speaker and Assembly Democrats had been looking for some assurance from the Governor and/or Controller that the VLF would continue to fund public safety and other essential services, and had delayed passing SB 19X until this assurance was provided. In the floor debate on the mid -year budget cut bills, Assemblyman Ray Haynes suggested strongly that there is no way administratively that the VLF can be raised...... So, the debate will continue well beyond here. Our Message: City officials and their LOCAL coalition partners have consistently stated that we want the state to keep its promise, by not cutting funds for local services. We're encouraged to see that state officials recognize the importance of both keeping that promise, and of protecting police, fire and other essential local services. .................. The legal opinion: "VLF Offset— Criteria Used to Determine Insufficient Moneys," is available at http: / /www.cacities.org/budget under the budget events heading for March 10. Treasurer Angelides focused on the need for California to invest public funds in its future, specifically education and infrastructure. Three principles were cited as a basis for broadly and fairly spreading the tax burden required for these investments: stability over time; revenue options for local government to engage citizens at the local level; and federal income tax deductibility. When asked if local revenues should be constitu- tionally protected, Angelides responded that it was reasonable to be on the table though he felt local officials should seek local empowerment rather than protection under the current dysfunctional system. Angelides reported that he had dis- cussed AB 1221 with Assembly Member Steinberg, which would swap local sales tax for property tax; he said that he believes the concept was a move in the right direction though, not a panacea for all the ills of the current system. Controller Westly said that he had experience in federal, county and local government as well as in the private sector as an executive with eBay. It is the private sector background that Westly drew upon to develop his recommendations for the future of government. He noted that government should examine where the greatest return on investments occurs in managing public funds and develop measurement and accountability factors to gain public confidence. When reflecting on his experience in Silicon Valley where individuals with opposite views were able to reach consensus to achieve common purposes, Westly observed that the decision- making in Sacramento is stalemated because both parties take a hard line approach rather than work together to develop pragmatic solutions. He also recommended government develop a customer -focus in service delivery and use technology to get rapid customer feedback. Other speakers addressed national progress on the Streamlined Sales Tax Project (SSTP), which is an effort by 30 states to simplify sales and use tax application and administration to encourage collection of use tax by remote ven- dors, and the participation of California in SSTP. The SSTP and its potential impact on California sales and use tax structure will be discussed at the March 26 Board of Equalization meeting. Condnued on Page 7 Visit the League's Official Web Site -- www.cacities.org PRIORITY FOCUS /PAGE 5