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Home My WebLink About5/13/2009 - STAFF REPORTS - 2.J. Geoffrey Kiehl From: Geoffrey Kiehl Sent: Wednesday, May 13, 2009 5:11 PM To: David Ready,- Tom Wilson Subject: FW: [Members] City and County Impacts of Proposed $2B Local Prop TaxBorrowing Attachments: RiversideCountyDOPPropTaxlmp090508.pdf David/Tom—The County is estimating the impact of the proposed $2 billion property tax take-away at$2,163,489 — very close to the$2 million number we mentioned to the Council when word of this First came out on May 6`11. If this does materialize as a proposal coming out of the Governor's Office (as opposed to just a suggestion of from the State Department of Finance),then I suggest we initiate some lobbying efforts. Attached is the page of the report that shows all of the projected losses for cities in Riverside County. Jeff From: members-bounces@csmfo.org [mailto:members-bounces@csmfo.org] On Behalf Of Michael Coleman Sent: Wednesday, May 13, 2009 3:47 PM To: 'CSMFO Mailing List' Subject: [Members] City and County Impacts of Proposed $213 Local Prop TaxBorrowing I have just posted my estimated impacts for each city and county of the DOP property tax borrowing proposal which would occur in FY2009-10. The estimates follow the approach described in the memo "How to Calculate Your Agency's Impact From a Possible$2 Billion Statewide Borrowing of Local Property Taxes." That memo also contains answers to frequently asked questions that may be helpful to you These are based on estimated FY2008-09 property tax, VLF swap and sales tax triple flip data. You may have more recent and better estimates of these amounts for your agency. Special Districts receiving property tax are included in this proposal but I de not have adequate data to compute reasonably close estimates for special districts. You'll find the table here: htto://www californiacityfinance.com/#CITY-STATE titled "Estimated City and County Impacts of the DOF Proposal." Michael Coleman 646 Fiscal Policy Advisor League of California Cities 530.758.3952 vvww.CalifomiaCityFinance.com 0S1 1`j/face t Estimated FY09-10 City & County Impacts of the State Dept of Finance Draft Proposed Local Property Tax Borrowing Under PropositionIA(2004) Note:Prop1A stipulates a maximum amount that may be borrowed statewide. it does not specify how that amount might be allocated. These figures assume an 8%perjurisdiciion allocation as implied in the DOF proposal. See notes pure 15. Property Taxes Allocated_ -FY2008-09 estimated Total sec/[lnsec Prop Tax in Sales'rax Total Est. Impact City/County PropertYTax 1 T,ieu of VUF 2 TripleFlil)3 2008-09 at 8% -------------------------------------------------------------------------•-------------------•-• AUBURN 21589.060 931,467 1,114,539 4,635,065 370,805 COLFAX 345.441 133174 156,597 635,203 50,816 5,988,475 2,686,241 664,201 9,338,917 747,113m LOOMIS 1,059,762 524.790 w~ 280,435 1,864,993 149,199 ROCKLIN 9,771,298 3,859.427 1,931,466 15,592,191 1,247,375 ROSEVILLE 28,204,236 8,000,835 10,648.978 46,863,049 3.749.044 - - '--'----------------------------------------------.............................................................................. County of PLACER 108,142,093 30,490,997 3,623,616 142;56,707 11,380,537 PORTOLA 327,829 184.193 60,549 �..- 572,571 45,806� County of PLUMAS 8,675,714 2.362.351 536,686 11,574,750 925,980 W _J.._.__._. _.----------- .-----________� BANNING 3,118,210 2,200,237 603,095 5,921,541 473,723 BEAUMONT 1,308,572 3,140,249 717,617 5,166,439 413,315 BLYTHE ..� 1,305,457 1,456,495 476,276 3,238,229 259,058 -----------------------------------------------------------------------....'.'.........---......,............-....--- .._......,...-.---.-- CALIMESA _ 689,747 292,883 142,775 1,125,405 90,032 CANYON LAKE 1.100,724 865,388 31,373 1,997,485 159,799 w CATHEDRAL CITY 1,218,002 3,234,037 2,059,170 6,511 209 520,897 .................................................................................... COACHELLA 1,722,672 5.085.680 878,148 7,686,500 614,920 .................................................................................................................. CORONA 32,170,642 1,317,973 9,281,542 52.770,157 4,221,615 DESERT HOT SPRINGS 1,759,231 2,498,349 252,368 4.509.947 360,796 .. ..................................................................................................................... HE MET 8,065,763 5,909,734 2,571,325 16,546,822 1,323,746 INDIAN WELLS 6.278,251 870,388 251,608 7,400,248 592,020 .............................................................. -------------------'-------------------- --- ------ INDIO 7,848,419 8685,510 1,996,728 18,530,657 1,482,453 -......-.. . ............ --. ... ELSINORE 3,102,823 3.804.124 1,938.986 8,845,932 707.675 LAQUINTA 4134350 4,523,617 2_18,o45 10,876,012 870,081 MENIFEE _0_ 0 177,955 177,955 14,236 MORENO VALLEY 8,144,359 15.916,199WµW 3,393,737 27,454,296 2,196,344m MURRIETA _ 91951,382 7.174.038 2,993,502 20,118,922 1,609,514 NORCO - r 2,249,508 2.181.712 1,366,599 5,797,879 463,830 T PALM DESERT 9,561,887 5,593,551 4,307,932 19,463,470 1,557,078 -- ---------------------------------------------------- ------- PALM SPRINGS 20878,6665 w 3,816961 - 2,347,986 27,043,612 2,163,489 PERRIS 5,985,587 4,928185 1,514,885 12,428,657 994,293 RANCHO MIRAGE 2186 066 1 521,275 1,351,266 5,058,607 404,689 RIVERSIDE_ 51.710.213 22,370,444 12,491,102 86,571,759 6,925,741-... SAN JACINTO � 2,744,785 8,743,080 523,132 7.010.997 560,890 TEMECULA m µ 8 859,691 µ µ 6,594,846 6,942,166 r 22,296,703 1,783,736 WILDOMAR _ 0 0 w 0 0 0� County of RIVERSIDE 299,363,291 213,129,269 9,957,573 5)2,450,133 40,996,011 May 13,2009 califprniacityfinance,com 9 Of 15 RESOLUTION NO. 22483 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, DECLARING THE CITY OF PALM SPRINGS IS EXPERIENCING A SEVERE FISCAL HARDSHIP DUE TO THE STATE'S SEIZURE OF LOCAL PROPERTY TAX FUNDS AND THE CONTINUED ADOPTION OF UNFUNDED MANDATES BY THE STATE. OF CALIFORNIA. WHEREAS, the current economic crisis has placed cities under incredible financial pressure and caused city officials to reopen already adopted budgets to make painful cuts, including layoffs and furloughs of city workers, decreasing maintenance and operations of public facilities, and reductions in direct services to keep spending in line with declining revenues; and WHEREAS, since the early 1990s the state government of California has seized over $8.6 billion of city property tax revenues statewide to fund the state budget even after deducting public safety program payments to cities by the state; and WHEREAS, in FY 2007-08 alone the state seized $895 million in city property taxes statewide to fund the state budget after deducting public safety program payments and an additional $350 million in local redevelopment funds were seized in FY 2008-09; and WHEREAS, the most significant impact of taking local property taxes has been to reduce the quality of public safety services cities can provide since public safety comprises the largest part of any city's general fund budget; and WHEREAS, in 2004 the voters by an 84% vote margin adopted substantial constitutional protections for local revenues, but the legislature can still "borrow" local property taxes to fund the state budget; and WHEREAS, on May 5 the Department of Finance announced it had proposed to the Governor that the state "borrow" over $2 billion in local property taxes from cities, counties and special districts to balance the state budget, causing deeper cuts in local public safety and other vital services; and WHEREAS, in the past the Governor has called such "borrowing" proposals fiscally irresponsible because the state will find it virtually impossible to repay and it would only deepen the state's structural deficit, preventing the state from balancing its budget; and WHEREAS, the Legislature is currently considering hundreds of bills, many of which would impose new costs on local governments that can neither be afforded nor sustained in this economic climate; and Resolution No. 22483 Page 2 WHEREAS, state agencies are imposing, or considering, many regulations imposing unfunded mandates on local governments without regard to how local agencies will be able comply with these mandates while meeting their other responsibilities; and WHEREAS, the combined effects of the seizure of the City's property taxes, increasing unfunded state mandates, and the revenue losses due to the economic downturn have placed the city's budget under serious fiscal pressure; and WHEREAS, our city simply can not sustain the loss of any more property tax funds or to be saddled with any more state mandates as they will only deepen the financial challenge facing our city; and WHEREAS, a number of the City's financial commitments arise from contracts, including long term capital leases and debt obligations which support securities in the public capital markets, that the City must honor in full unless modified by mutual agreement of the parties. NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF PALM SPRINGS has determined that the City will experience a severe fiscal hardship if the recommendation of the Department of Finance to "borrow" $2 billion of local property taxes is supported by the Governor and the Legislature; and RESOLVED FURTHER, that the City Council strongly and unconditionally opposes the May 5 proposal of the Department of Finance and any other state government proposals to borrow or seize any additional local funds, including the property tax, redevelopment tax increment, and the city's share of the Prop. 42 transportation sales tax; and RESOLVED FURTHER, that the City Council strongly urges the state legislature and Governor to suspend the enactment of any new mandates on local governments until such time as the economy has recovered and urges the state to provide complete funding for all existing and any new mandates. RESOLVED FURTHER, that the City Clerk shall send copies of this resolution to the Governor, our state senator(s), our state assembly member(s) and the League of California Cities. ADOPTED this 13th day of May, 2009. David H. City Ready, g Ci Manager ATTEST: James Thompson, City Clerk Resolution No. 22483 Page 3 CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I, JAMES THOMPSON, City Clerk of the City of Palm Springs, hereby certify that Resolution No. 22483 is a full, true and correct copy, and was duly adopted at a regular meeting of the City Council of the City of Palm Springs the 13th day of May, 2009, by the following vote: AYES: Councilmember Foat, Councilmember Hutcheson, Councilmember Weigel, Mayor Pro Tern Mills, and Mayor Pougnet. NOES: None. ABSENT: None. ABSTAIN: None. James Thompson, City Clerk City of Palm Springs, California