HomeMy WebLinkAbout2004-10-04 City Council (8)City of Palo Alto
City Manager’s Report
TO:
FROM:
DATE:
SUBJECT:
CITY MANAGER
OCTOBER 4, 2004
HONORABLE CITY COUNCIL
DEPARTMENT: CITY MANAGER
CMR:441:04
ADOPTION OF A RESOLUTION IN SUPPORT OF PROPOSITION 1A -
PROTECTION OF LOCAL GOVERNMENT REVENUES
RECOMMENDATION
Staff recommends that the Council adopt a resolution of support for Proposition 1A,
Protection of Local Government Revenues.
BACKGROUND
On March 1, 2004, Council adopted a resolution of support for the League of California
Cities Local Taxpayers and Public Safety P¢otection Act, Proposition 65 (CMR: 151:04).
Since that time, the California Legislature and Governor Schwarzenegger reached a
compromise deal, Proposition 1A (based on the budget bill SCA 4), which made a
number of change; to the League’s original proposition.
As a result of Proposition 1A, local government will collectively forgo $2.6 billion
dollars over the next two years in exchange for the Governor’s support for this measure,
which will provide onstitutional protections against further state raids. Proposition 1A
has the full support of the Governor and the League of California Cities.
DISCUSSION
Proposition 1A is a ballot initiative on the November 2004 ballot. The measure will
amend the constitution to make it more difficult for the State to take local resources, such
as: sales taxes, property taxes and vehicle license fee revenues. Another important
component of Proposition 1A is the requirement that the Legislature fund State-mandated
local programs. If funds are not available for these programs, Proposition 1A will require
the programs be suspended.
CMR:441:04 Page 1 of 2
Proposition 1A does not prevent the State from borrowing from local governments in
times ,when ,th, e. Governor declares a fiscal emergency, although it does provide strict
cotidltions’ ~f~r ’ ’ ""suspen’dlng the proposed constitutional protections. These conditions
include the.Legislature passing, an urgency,bill by 213 vote and the additional passage of a
law specifying the full repayment of the loan, with interest, within three fiscal years.
.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.
It is important to note that the League’s original ballot measure, Proposition 65, will
remain on the November ballot and essentially compete against Proposition 1A. All of
the proponents for Proposition 65 must now oppose that measure and instead support
Proposition 1A.
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
This staff report does not represent a project under the California Environmental Quality
Act (CEQA).
ATTACHMENTS
Attachment A:Resolution Supporting Proposition 1A
PREPARED BY:
CHRIS ISEN
Assistant to the City Manager
CITY MANAGER APPROVAL:
~AMILY
ssistant City M~er
CMR:441:04 Page 2 of 2
NOT YET APPROVED
RESOLUTION NO.
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO
ALTO SUPPORTING PROPOSITION IA -PROTECTION
OF LOCAL GOVERNMENT REVENUES
WHEREAS, state government currently seizes more than
$5.2 billion annually in £ocal property funds statewide from
cities, counties and special districts, costing !oca!
governments more than $40 billion in lost revenues over the past
12 years; and
WHEREAS, the State’s ongoing shifts and raids of local
property tax funds and of other funding dedicated to local
governments have seriously reduced resources available for local
services including fire and paramedic response, law enforcement,
public health and emergency medical care, roads, parks,
libraries, transportation and other essential local services;
and
WHEREAS, these funding raids add pressure for local
governments to increase fees and taxes to obtain funds necessary
to maintain basic local service levels; and
WHEREAS, the State has continued this drain of local
resources during periods when the state budget has been
overflowing with surpluses; and
WHEREAS, Proposition IA is a measure to limit the
State’s ability to take and use local government funding that
will appear on the November 2004 statewide ballot; and
WHEREAS, Proposition IA would preserve local public
safety, healthcare and other essential local services by
protecting local government funding from state interference; and
WHEREAS, Proposition IA will not raise taxes and, in
fact, wil! help reduce pressure to increase !ocal fees and taxes
by limiting state .raids of loca! government funding; and
WHEREAS, Proposition IA does not reduce funding for
schools or any other state program or service, and Proposition
IA was carefully written to allow flexibility in the event of a
state budget emergency; and
WHEREAS, Proposition IA is the result of a bipartisan
agreement developed and supported by a diverse coalition,
including Governor Schwartzenegger, Democrat and Republican
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