Loading...
HomeMy WebLinkAbout2004-03-01 City Council (12)City of Palo Alto City Manager’s Report TO: FROM: DATE: SUBJECT: CITY MANAGER MARCH 1, 2004 HONORABLE CITY COUNCIL DEPARTMENT: CITY MANAGER CMR:151:04 ADOPTION OF A RESOLUTION IN SUPPORT OF THE LOCAL TAXPAYERS AND PUBLIC SAFETY PROTECTION ACT RECOMMENDATION Staff recommends that the Council adopt a resolution of support for the League of California Cities’ Local Taxpayers and Public Safety Protection Act. BACKGROUND The current state/local fiscal relationship has placed an incredible burden on municipalities throughout California. The present system allows the state to reallocate funds previously committed to local government to solve its fiscal problems. This has created an untenable situation for local government and an unnecessary lack of trust between the two entities. The state’s inability to effectively manage its budget has led to a record $38 billion deficit. Over the past 12 years, the state has taken approximately $6.9 billion in local property taxes away from cities. In FY 2003-04, the amount will equal $800 million. This does not include a loss of funding due to a change in the distribution of the Vehicle License Fee monies, nor does it include a number of other creative financing schemes such as the newly proposed ERAF shift, which would result in a further loss of local funds. The state’s problem has become Palo Alto’s problem as the state has once again taken local government revenues in an attempt to cover its budget shortfall. This has contributed to significant City budget shortfalls and forced Council and staff to make difficult budgetary decisions. The state has diverted over $30 million in the past decade from Palo Alto. CMR:151:04 Page ! of 3 DISCUSSION The League of California Cities (League) advocates on behalf of 478 California cities. At its September 10, 2003 annual conference, League delegates voted to support the Local Taxpayers and Public Safety Protection Act, which is aimed at protecting local revenues from future state take-aways. The California State Association of Counties (CSAC) and the California Special Districts Association co-sponsor this measure. Planned for the November 2004 ballot, the measure will amend the constitution to make it harder for the state to take local resources. A super-majority vote in the legislature will be required before the state can reallocate dedicated local government revenues for state purposes. It will also require a majority of the state’s voters to approve any structural changes in the state/local fiscal system. The measure would not increase taxes or funding to local governments. It would not reduce funding that schools receive from local property taxes or the state, nor would it reduce funding to other state programs. The Local Taxpayers and Public Safety Protection Act would protect vital local government services by: Requiring voter approval before the legislature can reduce local government revenues or take them for state, rather than local purposes. Ensuring that local tax dollars are available to fund local services like police and fire, emergency and trauma care, parks, roads, libraries and water delivery. Making it absolutely clear that if the state legislature mandates that local government provide new or expanded programs or services, the state would have to reimburse local governments for the cost of those programs. Providing flexibility for state budgeting decisions, while requiring voter-approval on any future state legislative actions that would reduce funding for essential local services. ALTERNATIVES TO STAFF RECOMMENDATION Council may chose to refer the matter to the Policy and Services Committee for further review. POLICY IMPLICATIONS This resolution is consistent with existing City policies, including the Council Top 5 priority for City Finances. ENVIRONMENTAL REVIEW CMR:151:04 Page 2 of 3 This staff report does not represent a project under the California Environmental Quality Act (CEQA). ATTACHMENTS Attachment A:Resolution - Local Taxpayers and Public Safety Protection Act PREPARED BY: CITY MANAGER APPROVAL: CHRIS Assistant to the City Manager Assistant City Manager CMR:151:04 Page 3 of 3 NOT YET APPROVED RESOLUTION NO. RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO SUPPORTING A STATEWIDE BALLOT INITIATIVE TO REQUIRE VOTER APPROVAL BEFORE STATE GOVERNMENT MAY TAKE LOCAL TAX FUNDS WHEREAS, state government annually seizes over $800 million in city property tax funds (ERAF) statewide, costing cities over $6.9 billion in lost revenues over the past 12 years and seriously reducing 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 tax funds that are needed to finance critical city services such as public safety, parks, street maintenance, housing and economic development; and WHEREAS, the deficit financing plan in the state budget depends on a local property and sales tax swap that leaves 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 use local tax funds to balance the state budget unless the voters limit 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 state government; and WHEREAS, the General Assembly of Voting Delegates of the League of California Cities at its September i0, 2003 meeting voted to sponsor a statewide ballot initiative to empower the voters to limit the ability of state government to confiscate local tax funds to fund state government; and WHEREAS, 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 040220 syn 0091441 NOT YET APPROVED appropriate local tax funds to fund state government operations and responsibilities. NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows: SECTION I. The City hereby expresses its strong support for a statewide ballot initiative to allow voters to decide whether local tax funds may be taken, confiscated, shifted, diverted or otherwise used to fund state government operations and responsibilities. SECTION 2. 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. SECTION 3. The residents of the City of Palo Alto are encouraged to become well informed on the initiative and its possible impacts on the critical local services on which they rely. SECTION 4. The City Clerk is hereby directed to send a copy of this resolution to the Executive Director of the League of California Cities. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST:APPROVED: City Clerk APPROVED AS TO FORM: Interim City Attorney Mayor City Manager Director of Administrative Services 040220 syn 0091441 2