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~Z LEAGUE CLARIFIES REVIEW PROCESS ON PROPOSED SPENDING CAP INITIATIVE League Executive Director Chris McKenzie distributed a memo this week to all cities to clarify that the League has not yet taken a position on Gov. Arnold Schwarzenegger's proposed spend- ing cap initiative, known as .Live VWhin Your Means." The memo was distributed following publica- tion of a Los Angeles Times article entitled .Cities and Counties Balk at Plan for State Spending Cap," which stated that cities and counties have serious concems with the measure. The measure has not yet qualified for the ballot. Assuming that it does qualify, it is expected to be placed on the November 8 ballot - if the governor calls a special election for this fall. County officials are quoted in the story, but no League representative or city official was quoted as expressing concems. "We anticipated that the story might lead to city officials being asked about the measure by their own local media," said McKenzie. .We thought it would be helpful if city officials had information on where the League was in analyzing the proposal.' The memo made the following points about the measure and the League's review process: . The League, the Califomia State Associa- tion of Counties and the LOCAL Coalition have !!2! taken positions on the Live Within OuiMããns Act. . League attomeys, our fiscal consultant and other experts are carefully reviewing this initiative, and 'Ne're working with the various parties involved to get answers to some questions and policy issues. We will not take a position until their analysis is complete, and after we have taken this item through the League's policy process: the Revenue and Taxation Policy Committee for recommendation, and subsequently the board of directors for its review of the policy committee position and adoption of a final position. We cannot predict what our position will be on the measure until this process runs its course. . Our analysis thus far has indicated that the spending cap measure does not affect local Prop 172 funding (sales tax for public safety). We also support provisions that would prevent the Legisla- ture in future years from transferring Prop 42 funds (sales tax on gasoline) to the state general fund - and away from transportation projects, including funds to cities and counties for local street and road maintenance projects. . Gov. Schwarzenegger has been a great ally of local govemment, in both the recent past and in the present He helped push through the historic landslide passage of Proposition 1 A, and his May Budget Revise proposal (to fully fund Prop 42 and provide early repayment of half of the 2003 vehicle license fee loan) also reflects his commit- ment to local govemments and local services. We value this partnership, and the govemor's ongoing support for local services. ..... . . . .. . ..... . INTERESTED IN SERVING ON THE LEAGUE BOARD OF DIRECTORS? The League of Califomia Cities welcomes nominations from eleded officials interested in serving in five at-large positions (two-year term), or Second Vice President (one-year term). All nominees for Second Vice President must cur- rently be serving or have previously served on the board of directors. If you are interested in submitting your name (or another elected official's name) for nomination to' the League board of directors, please provide the information requested on the Nomination Form, along with a bio and letter requesting consideration, to the League's Sacramento headquarters on or before end of business on Friday, July 8, 2005. Nomination materials can be found on the League's Website at www.cacities.org, in the board of directors sec- tion, or can be obtained by contacting League staff member Mimi Sharpe at (916) 658-8232 or sharpem@cacities.org. PAGE 2/PRIORITY FOCUS Visit the League's Official Websiteuwww.cacities.org