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8. A ~ -=1 BUDGET from page 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Indeed, core concepts embedded in the package revenues. As a result, beginning in FY have been carefully analyzed and negotiated 2006-07 cities on a statewide basis will be among cities, and among our local government receiving more reve'1ues from property tax partners, literally for years. than sales tax for the first time since before Proposition 13 j,1 1978. No further We are deeply concerned thaI "quick fix" changes are needed until the impact of approaches based on theory, rather than careful this change in local finance can be ad analysis, will lead the state and local government equately assessed. down the "unintended consequences" path that the state carved out with energy deregulation. City officials should coordinate with their League Regional Representatives in the area to We urge city officials to contact their legisla- generate letters and phone calls to members of tors and ask them to support the budget package the Assembly and Senate asking them to RE- and constitutional amendment as negotiated. JECT any attempt to amend the Administration's Constitutional reform is the most important priority local government finance package with another for the League and our members. It is the only sales-tax-for-property-tax-swap proposal and to way to provide predictability and stability for local SUPPORT the package agreed to by the Adminis- services, and to ensure that our cities can plan for tration and local government!!! (See related the current and future needs. article: "Passing the LOCAL Budget Package: We Need YOU!") The arguments against the sales tax/property tax swap proposal are as follows: There is No Evidence That a Swap Will . Change Decision-Making. The advo- For more information on this and cates for such a proposal contend that a swap of this nature would make local other League issues, visit decision-making less reliant on the ap- www.cacities.org. proval of retail development to fund city services, but there are no credible studies that test or confirm this premise. Moreover, cities have supported legislation that has passed in recent years to limit local tax incentives for large retail projects. There is no compelling reason to give up a key local government revenue source simply to experiment with this untested theory. . Administration Package Balances Local Revenues. The local government finance package agreed to by local governments and the administration already shifts about $4.1 billion in property tax revenue to local government in exchange for vehicle license fee revenues. This change in local finance will make significant strides in better balancing the mix of local government Visit the League's Official Web Siteuwww.cacities.org PRIORITY FOCUS/PAGE 7