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9 X -2.5 AB 1221 from page 1 ............... The date for hearing the Suspense File has not officially been set. The Committee has another regularly scheduled meeting next week on the 28th. The 30 of May is the deadline for clearing bills from the fiscal committee (Appropriations). However, the May 30 deadline can be waived and has been waived in the past. As soon as we know the Sus- pense File date, we will let you know. At the hearing there was an opportunity for brief testimony. The author presented the bill to the committee and explained his intent to amend the bill to provide constitutional protection for sales tax and all property taxes going to local government, after the swap in AB 1221 is executed. This would prevent the state from taking/shifting/stealing these local govem- ment revenues during future economic downturns. The League voiced its position of "oppose, unless amended" and acknowledged the proposed amendment by Steinbergs as a "good faith" step toward the local government position. In response to this offer by the authors of AB 1221, the League is establishing a technical committee on AB 1221 to refine everyone's understanding of the bill's impact on local government revenue. In addition, the mea- sure will be referred to the League's Fiscal Reform Task Force to formulate a policy position on the bill as it is proposed to be amended. QUOTESfrom page 5••.•6••••0••••' proposals that would bring the total mortgage to $17 billion. Also, the budget would be balanced for only a few seconds; by July 2004 California would again be in the hole to the tune of $7 billion." The Orange County Register, 5/21/03, Choosing gimmicks over leadership. "Big surprise. Another crisis has unfolded on Gov. Gray Davis' watch, and instead of leading, he once again punted the ball down the field. His latest "solution" to a budget deficit projected to be as high as $38 billion is to cobble together a May budget revision, released last week, that avoids the hard decisions, and leaves others to work things out" Sacramento Bee, 5/20/03, Dan Walters: Real budget crisis is the $8 billion annual income -outgo gap. "Numerology is the pseudoscience that seeks occult meanings in numbers, but one needn't be an adherent to find significance in the recurring appearance of $8 billion in the state's budget crisis. That was how much, more or less, Gov. Gray Davis and the Legislature foolishly spent out of a one -time windfall of income taxes three years ago. And that's roughly how much out of balance the state budget has been every year since." The League has asked the author to hold the bill in the Assembly Appropriations Committee and make it a "two -year measure." This means that this particular vehicle, AB 1221, could not be heard for the remainder of this year, but would be available as a vehicle in next year's session. This would give the parties sufficient time to work through the complexi- ties of the bill, which are many. The author has not yet responded to that request. City officials should expect action on the bill in the next week to 10 days. If passed by the Appropria- tions Committee, the bill will then move to the Assembly floor. The deadline to clear Assembly bills from the Assembly floor is June 6`. News Stories Los Angeles Times, 5/15/03, Bitter, But a New Start. "The revised budget Gov. Gray Davis presented to the Legislature on Wednesday is a distasteful brew of tax increases, deep program cuts and odious debt rollover. With the state backed into a corner by banks and investors, it may also be California's last chance." Los Angeles Times, 5/16/03, Davis Chides GOP for Budget Behavior — Governor Calls Opposition to his Revised Spending Plan Irresponsible. "One day after outlining his plan for the state's fiscal recovery, Gov. Gray Davis on Thursday accused Republican legislators of acting irresponsibly by refusing to support higher taxes to help close the state's $38.2 - billion budget shortfall." Continued on Page 8 Visit the League's Official Web Site -- www.cacities.org PRIORITY FOCUS /PAGE 7