AgdaPkt 2003-08-11 - Laserfiche WebLink

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I -A- N LOSS OF VLF HURTS LOCAL GOVERNMENTS The following guest editorial written by Hal Ledford, City Manager of La Puente, was originally published on July 19th in the San Gabriel Valley Newspapers: Pasadena Star News, San Gabriel Valley Tribune and the Whittier Daily News. 1 read with interest the recent editorial urging that the Vehicle License Fee (VLF) 5e lowered and believe that it is important to share the perspective of local governments that stand to be victims in the political struggle over the VLF. In the early part of the last century, each local city and county levied its own personal property tax rate on automobiles. Different cities levied different amounts, creating a great deal of confusion when people had to license their cars every year. In the 1930s, the state of California decided it was simpler to collect a uniform fee of 2 percent of vehicle's value and then distribute that money to local governments. That worked for over 70 years. In 1988, the voters of California even amended the state Constitution to guarantee that VLF funds go exclusively to local governments for law enforcement, roads, parks and other critical local services. In 1998, the state Legislature in an exercise ofpolitical generosity chose to rebate two thirds of the VLF back to the vehicle owners. In Sacramento, Democrats and Republicans alike stood up and took credit for that essentially amounted to giving away someone else's money, namely the tax dollars that pay for your local services. The Legislature recognized the inequity ofsuch an action and chose to use tax dollars to make up the difference to local governments. Republicans and Democrats promised to raise the rate id the state could no longer afford to offset the rebates. Five years later, it is evident that the state cannot continue to afford the offset. The VLF has returned to 1998 levels. We hear cries to permanently lower rates and punish the state. Those cries are misplaced, however, for the punishment of that action falls too close to home. It looks like your local government will have to suffer the loss. In La Puente, the VLF represents our single largest revenue source, providing over 35 percent of the city's tax revenue. This is true ofpredominantly bedroom communities. The city only receives six cents of every dollar ofproperty tax paid in the city, or less than 10 percent of our tax revenue. We do not complain (at least not until now) and instead manage an extremely efficient operation with a small staff and engage in the efficient use ofprivate contractors. We have closely watched our expenditures and, as a result of our fiscal management, between 1999 and 2003 our general fund expenditures rose an average of I percent per year. This is in marked contrast to state and federal expenditures. We ask our residents to be mindful that their cries to lower the VLF will not punish the state. Instead, it will most likely mean cutbacks in local services that they use every day in their community and neighborhoods. This includes law enforcement, fire protection, roads, parks, lights, libraries, crossing guards, senior centers, public landscaping among countless other programs. Like most Californians, we are not eager to either levy or pay taxes. However, reasonable taxes are the price we pay for the social and physical infrastructure that binds us together and creates an environment in which people and business can thrive. For over 70 years, a 2 percent VLF was considered a reasonable price to help pay for local services. If this newspaper and others think that is too much, then a reduction should only be considered in the context of a balanced, equitable and comprehensive reform in the manner in which local and state services are funded. Let's not punish the innocent.