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@*A4P VLF LAWSUITS from page 1......... " " . . . . . . . . . " " " . . " . . . . . . . . . " 00 . " " The San Diego Case: Court Ruling May Lead to Reduction in VLF Rates In 1991, the state transferred the responsibility for administering a number of programs assisting medically indigent persons to the counties. To help pay for these services, the state extended the depreciation schedule used for establishing vehicle license fee rates. Doing so generated additional revenues that were then paid to the counties to fund these new programs. The legislation setting out the groundwork for the realignment of these programs included several "poison pill" provisions. One of these provisions provided that if a court of appeal or the state Su- preme Court issued a ruling that the state was obligated to reimburse counties for the costs of providing theses services, the vehicle tax would revert to its pre -1991 levels. This provision was intended to prevent counties from challenging the realignment plan. Subsequently, San Diego County sued the state claiming that the state failed to fully fund these new programs. The county claimed it found itself forced to provide services without adequate state compen- sation. The court of appeal agreed and awarded the county $3.4 million. Because of the ruling, the 'poison pill" provision could be invoked repealing the 1991 change in the depreciation schedule. This would reduce VLF revenues by approximately 24 %. Govemor -elect Schwarzenegger has agreed to appeal the court decision. While vowing to repeal the June increase in VLF rates, the decision — if left to stand — would cut the VLF more than he intends. This would make it harder for the state to compen- sate cities and counties that depend on VLF rev- enues to fund essential public services. The state Supreme Court's decision whether to modify the ruling is expected by the end of the year. Taxpayers Group Files Second Lawsuit on VLF Trigger On November 17, the Howard Jarvis Taxpayers Association filed a second amended complaint challenging the pulling of the VLF trigger. Even though the trigger was "unpulled" by Governor Schwarzenegger that same day, the attorneys for the HJTA assert that the entire VLF statutory scheme is invalid and tha any governor is still "free to raise car taxes." Last month, Judge Thomas Cecil of the Sacra- mento County Superior Court ruled that he would dismiss the lawsuit because none of the parties bringing the action had actually paid the higher vehicle fees. Now, in their third attempt to file a valid complaint, senators Ross Johnson and Pete Knight, and assembly members John Campbell, Dave Cogdill, Doug LaMalfa, Bill Maze, and Kevin McCarthy claim they have paid the higher fees. In addition, they assert that they have asked for a refund of the higher fee amounts and that their requests for a refund have been denied by the Department of Motor Vehicles. The state must file a response to the lawsuit within 30 days. The League will continue to monitor the lawsuit and keep cities informed of further developments. LOOKING FOR CALIFORNIA'S BEST TO FILL A POSITION IN YOUR CITY? Westem City Magazine's job opportunity section is the source for job seekers looking for positions in local government. According to our reader survey, the job opportunity section is the best read section of our magazine! When you place an ad in Western City Magazine, it will be posted at no additional charge on our website, which receives over 60,000 hits per month. Call to place your recruitment ad today! 800 262 -1801 or visit our website www.westerncity.com. PAGE 6 /PRIORITY FOCUS Visit the League's Official Web Site -- www.cacities.org