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t.e~ ~ ÞF~{Ìs:t~& 1400 K Street, Suite 400" Sacramento, Cal~omia 95814 Phone: 916.658.8200 Fax: 916.658.8240 CITIES www.cacities.org LOCAL TAXPAYERS AND PUBLIC 3AFETY PROTECTION ACT -AN OVERVIEW November 2004 Election State"Local Fiscal System Broken. There is widespread agreement that the state-local fiscal relationship is broken. One of the reasons is because state leaders no longer respect the difference between state and local tax revenues. In recent years, the state legislature and governor have approved laws that divert, use or delay the payment of local tax revenues to local govemments that finance public safety, public health, park, library, street maintenance and other vital community services. This has caused pressure for higher local fees that can increase the cost of housing. Local Funds Drained for Higher State Spending. Since 1991 more than $30 billion of local property taxes have been drained from cities, counties and special district~osting cities alone $800 million in FY 200W4 and $6.9 billion the last 12 years. Even in years of state budget surpluses, the state has used these funds to finance ns constitutional funding obligation to public education, allowing it to increase state general fund spending for other state programs. This has come at the expense of vital/ocal public safety and other services. State Shifts Costs to Local Governments. In recent years the state also has shifted costs for state-sponsored programs and delayed constitutionally required reimbursements to local governments for state mandated programs and services. In the last two fiscal years, the state has "deferred' over $1 billion in constnutionally required reimbursements to locai governments for mandated services and programs. This cost burden is then paid with local taxes that should be used for important local services Constitutional Protection Needed Now. The League has joined forces wnh the Califomia State Association of Counties (CSAC) and the California Special Districts Association (CSDA) to sponsor a ballot initiative in November 2004, entitled the Local Taxpayers and Public Safety Profection Act, to put the voters in charge of whether local tax dollars should be used to fund state services. It will not raise taxes. It will not repeal laws the state has already passed. It will not require the return of property taxes already taken nor affect funding of schools. It will not prevent structural reform of the fiscal system--simply require that structural changes be planned collaboratively by state and local leaders ard approved by the voters. The initiative will do two simple things: " Public Vote Required. Require approval by a majority of the electorate before a proposed state law may take effect that reduces the sales, property and VLF funds of cities, counties and ¡pecial districts. Flexibility is provided to reduce the VLF and replace it with substitute revenues (Le., a 'backfill") without voter approval: and . Reimburse for Mandafed Costs. Clarify the state's duty to reimburse in a timely way for a new mandated program or higher level of service. protecting local governments from hidden cost shifts. Allows local governments to op~out of certain non-workplace safety and employee procedural rights mandates if the state fails to pay in a timely way. For More Information. Contact Chris McKenzie, Executive Director (916-658-8275); Mike Madrid, Public Affairs Director (916-658-8272); or Dwight Stenbakken, Deputy Executive Director (916-<558-8213). How to Make A Contribution. The League has established a political action committee (CITIPAC--ID # 1254399) for contributions to this initiative. For more information, contact 916-658-8273, email info@citipac.ol'Q or go to www.citipac.orq Revised C\: Iober 30. 2003 C I T I P A C www.citipac.org