AgdaPkt 2005-01-24 - Laserfiche WebLink

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B. A~t 0 BUDGET from page 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Even so, some funding to cities for specific programs outside Proposition 1 A was cut, de- ferred or suspended. In evaluating the impact of these cuts, we need to remember that Califomia's local governments are already a significant partner in helping to close the state's budget gap. (Please visit www. calocal.org for a copy of the LOCAL coaltion's response to the govemor's budget proposal.) ERAF Contributions Consistent with the Prop 1A agreement, local governments will once again contribute $1.3 billion in property tax shifts to help solve the state bud- get. Cities, counties and special districts will contribute $350 million each and redevelopment agencies will contribute $250 million. The indi- vidual city contributions will remain the same as 2004-05 and may be found on the State Controller's website at www.sco.ca.gov. The redevelopment property tax shift for both 2004-05 and 2005-06 (which remains the same) is avail- able at www.californiacityfinance.com. Additionally, local governments will continue to contribute the ongoing shift of approximately $5 billion in ongoing ERAF property tax shifts to help the state meet its constitutional requirement to fund schools. Transportation . Proposition 42: In light ofthe current fiscal crisis and long-term structural deficit, the governor's proposed budget has led to another year of proposed borrowing from Proposition 42 revenues for FY 2005-06. The value of Proposition 42 revenues is estimated to be $1.3 billion for the State's General Fund, approximately $253 m of which would come to local govemments. Further, the governor is committed to curbing the state's ability to borrow from Proposition 42 and will introduce legislation this year that consti- tutionally prohibits the suspension of future Propo- sition 42 transfers, beginning in fiscal year 2007- 08. As oftoday, no language has been drafted. Similar to Proposition 1A, this proposal will be accomplished through a constitutional amend- ment, to be placed on the ballot, which will require the state to payback without interest approximately $3.4 billion in Proposition 42 funds over 15 years beginning in FY 2006-07. While the current budget proposal is silent on whether or not Proposition 42 will be suspended in FY 2006-07, it leaves open this possibility. . Public Transportation Account "Spillover" Revenues: In addition to the PropOJ sition 42 suspension, the 2005-06 budget pro- poses to suspend a transfer of sales tax monies to the Public Transportation Account, equivalent to an estimated $216 million savings to the state's General Fund. Tribal Gaming Bonds Although tribal gaming monies were expected to generate a partial early payback of Proposition 42 monies and other transportation loans to the tune of $1.2 billion, a lawsuit filed to challenge aspects of the Tribal/State Compacts has thrown into jeopardy the issuance of those bonds. The governor's budget does not anticipate resolving that litigation in this fiscal year, so this revenue has not been included in the 05-06 budget. In addition, questions have arisen as to whether the total $1.2 billion will actually be realized due to securitization problems associated with the nature of the stabil- ity ofthe revenues stream. GoCalifomia Lastly, the governor announced a comprehen- sive strategy referred to as "GoCalifornia,. to enhance the impact of transportation investments over the next 10 years. As part of this effort, new performance measures for both the transportation system and state management are being devel- oped in partnership with statewide transportation stakeholders. As part of this strategy, the adminis- tration will focus on delivery tools for faster completion of transportation projects, including design-build contracting and public/private partner- ships. The administration will also focus on improving and facilitating the movement of goods Continued on Page ., PAGE 2/PRIORITY FOCUS Visit the League's Official Web Site--www.cacities.org