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HomeMy WebLinkAbout2/18/2004 - STAFF REPORTS (16) Date: February 18, 2004 To: City Council From: Assistant City Manager Subject: Resolution in Support of Local Taxpayers and Public Safety Protection Act RECOMMENDATION It is recommended that the City Council approve a Resolution supporting the Local Taxpayers and Public Safety Protection Act. BACKGROUND The Local Taxpayers and Public Safety Protection Act is the culmination of months of work between the League of California Cities, California State Association of Counties and California Special Districts Association to create a solution that will provide stability and security for local government funding. Research by the League has shown that the proposed Local Taxpayers and Public Safety Protection Act addresses the needs of California citizens by giving them the ultimate decision-making power when the State seeks to raid funds dedicated to local governments. In summary, the Act would: • Require voter approval before the legislature removes local tax dollars from the control of local government; • Insure that local tax dollars are dedicated to local governments to fund local public services; • Insure that the legislature reimburses local governments when the State mandates local governments to assume more financial responsibility for new or existing programs, and • Prohibit the legislature from deferring or delaying annual reimbursement to local governments for State mandated programs. The purpose of the Act is to increase local control over local tax dollars. The voters would have the final say on proposed actions by the State legislature that would further reduce local government funding. The Act would protect the vital local services that California residents rely on each and every day such as public safety and emergency care, senior and youth programming, roads, libraries, parks and transportation, by requiring voter approval before the State could reduce funding for local services or shift more costs for State programs to local governments. The Local Taxpayers and Public Safety Protection Act will not raise taxes, it will not repeal laws the State has already passed, it will not required the return of property taxes already taken nor will it affect the funding of schools. The Act requires approval by a majority of the electorate before a proposed State law may take effect that fi reduces the sales, property, and VLF funds of cities, counties and special districts. The Act would not prevent structural reform of the fiscal system. It simply requires that structural changes be planned collaboratively by State and local leaders and approved by the voters. The Act has been filed with the Attorney General's office for preparation of the title and a summary of the chief purpose and points of the proposed measure. If the Attorney General determines that the initiative measure requires a fiscal analysis, the Department of Finance and the Joint Legislative Budget Committee are required to prepare an analysis within 25 working days. When the official summary is complete, including a fiscal analysis, if needed, the Attorney General forwards it to the Secretary of State. At that time the initiative is placed into circulation for collection of signatures. It is anticipated this would occur in early February 2004. Because the initiative is proposed to amend the California Constitution, a total of 598,105 signatures of registered voters will be needed to qualify the measure for the November 2004 ballot. While State law prohibits the expenditure of public funds to promote ballot measures the City Council may adopt a resolution that officially endorses a ballot measure and confirms the prohibition on using government funds for political purposes. DISCUSSION For more than two decades, State government has been taking away increasing amounts of tax dollars that local governments use to provide essential services like police and fire protection, senior and youth programming, emergency and public health care, roads, parks and libraries. This has forced local governments to either raise local fees or taxes to maintain services or cut back on critically needed services. Starting in the early 1990's, State government now seizes annually over $800 million in city property tax funds (ERAF) statewide, costing cities over $6.9 billion in lost revenues over the past twelve years. Currently, the State takes away $2.2 million per year(net) from the City of Concord in property tax funds. In adopting the State budget this year, the legislature appropriated local vehicle license fee (VLF) backfill and redevelopment property tax funds that are needed to finance critical city services such as public safety, parks, street maintenance, housing and economic development. The VLF portion of the take-away was reversed for the time being by an emergency action of the Governor. However, the status of local VLF revenues in the State budget process has not been resolved. The current VLF backfill for the City of Palm Springs is approximately $1.8 million. State leaders no longer respect the difference between State and local tax revenues. Even in the years of State surpluses in the late 1990's, State government continued to divert local funds (ERAF) to finance its constitutional funding obligation to public education, allowing it to increase State general funds spending for other State programs. The Local Taxpayers and Public Safety Protection Act does not tell the State how to spend its own revenues. It only prevents the State from taking funds that are designated for local governments and local services, or shifting costs to local governments, unless first approved by the voters. The Act essentially confirms that local tax revenues are for local government services unless the voters decide otherwise. It is clear that State leaders will continue to use local tax funds to balance the State budget unless the voters limit the power of the legislature and Governor to do so. The Local Taxpayers and Public Safety Protection Act makes the voters of California the judges of whether local tax funds should be diverted, confiscated, shifted or otherwise taken to finance an ever-expanding State government. The League of California Cities has requested that cities offer support for a November 2004 ballot initiative that will allow voters to decide whether State government may appropriate local tax funds to fund State government operations and responsibilities. Troy L. But f, sistant City Manager - Administration -�� APPROVED City Manager Attachments: • Fact Sheet • Resolution 3 Information About The Local Taxpayers and Public Safety Protection Act Ensuring Voter Control Over Local Tax Dollars for Public Health, Safety and Other Essential Local Services The Problem: For more than a decade, the California State Legislature has been taking away increasing amounts of local tax dollars that local governments -cities, counties, and special districts -- use to provide essential services like police and fire protection, emergency and public health care, roads, parks, libraries clean water. In fact, through good times and bad, the State has been taking away billions in local tax dollars each year--forcing local governments to either raise local fees or taxes to maintain services, or cut back on critically needed services. The system is broken. Voters must act now to protect local services by protecting local tax dollars from being taken by the State. The Solution: The 2004 Local Taxpayers and Public Safety Protection Act would increase local control over our local tax dollars. This measure would let the voters have the final say on proposed actions by the State Legislature that would further reduce local government funding sources. It would protect the vital local services that California residents rely on each and every day- such as public safety and emergency care, roads, libraries, parks and transportation - by requiring voter approval before the State could reduce funding for local services or shift more costs to local governments. What this measure does: 1 Requires voter approval before the Legislature can take local government revenues and use them for state, rather than local, purposes. 2 Ensures that local tax dollars to fund local services like police and fire, emergency and trauma care, parks, roads, libraries and water delivery are not taken by the state 3 Makes it absolutely clear that if the State Legislature mandates that local governments provide new or expanded programs or services, then the State would have to reimburse local governments for the cost of those programs. 4 Provides flexibility for state budgeting decisions, but requires voter-approval on any future State Legislative actions that would reduce funding sources for essential local services. What this measure DOES NOT do: 1 Does not raise taxes. In fact, this measure will help decrease pressures for local fees and taxes by protecting local revenue sources from State raids. 2 Does not increase funding to local governments. Simply prevents the State Legislature from raiding future local government funding. 3 Does not reduce funding that schools receive from local property taxes or funding that schools receive from the State. 4 Does not reduce funding for other state programs like schools or highways. bk RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS SUPPORTING THE LOCAL TAXPAYERS AND PUBLIC SAFETY PROTECTION ACT STATEWIDE BALLOT INITIATIVE REQUIRING VOTER APPROVAL BEFORE THE STATE COULD REDUCE FUNDING FOR LOCAL SERVICES OR SHIFT MORE COSTS TO LOCAL GOVERNMENT WHEREAS, state government annually seizes over$800 million in city property tax funds (ERAF) statewide, which has cost cities over$6.9 billion in lost revenues over the past 12 years and seriously reduced resources available for local public safety and other services; and WHEREAS, in adopting the state budget this year the Legislature and Governor appropriated local vehicle license fee backfill and redevelopment property taxfunds that are needed to finance critical city services such as public safety, parks, street maintenance, housing and local economic development; and WHEREAS, the deficit financing plan in the state budget depends on a local property and sales tax swap that leaves future city services vulnerable if the state's economic condition fails to improve; and WHEREAS, the adopted state budget assumes an ongoing structural budget deficit of at least$8 billion, putting city resources and services at risk in future years to additional state revenue raids; and WHEREAS, it is abundantly clear that state leaders will continue to steal local tax funds to balance the state budget unless the voters put a stop to it by limiting the power of the Legislature and Governor to do so; and WHEREAS, the voters of California are the best judges of whether local tax funds should be diverted, confiscated, shifted or otherwise taken to finance an ever-expanding and inefficient state government; and WHEREAS, the General Assembly of Voting Delegates of the League of California Cities at its September 10, 2003 meeting voted to sponsor a statewide ballot initiative to empower the voters of this state to permanently limit the ability of state government to confiscate local tax funds to fund state government; and WHEREAS,the League has requested that cities offer support for a November 2004 ballot initiative that will allow voters to decide whether state government may continue to appropriate local tax funds to fund state government operations and responsibilities; and WHEREAS, the City Council of the City of Palm Springs believes that all confiscated, shifted, diverted, or otherwise stolen local tax funds should be returned to the local governments once the current state budget shortfall is corrected. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Palm Springs that the City hereby expresses its strong support for a statewide ballot initiative to allow voters to decide whether local funds may be taken, confiscated, shifted, diverted or otherwise used to fund state government operations and responsibilities. BE IT FURTHER RESOLVED, that the City Council and staff are authorized to provide impartial informational materials on the initiative as may be lawfully provided by the city's representatives. No public funds shall be used to campaign for or against the initiative. BE IT FURTHER RESOLVED,thatthe residents of the City are encouraged to becomewell informed on the initiative and its possible impacts on the critical local services on which they rely. BE IT FURTHER RESOLVED, that the City Manager is hereby directed to send a copy to the Executive Director of the League of California Cities. ADOPTED this _day of February, 2004 AYES: NOES: ABSENT: ATTEST: CITY OF PALM SPRINGS, CALIFORNIA By: City Clerk City Manager REVIEWED AND ADOPTED AS TO FORM: