HomeMy WebLinkAbout2004-02-17; City Council; 17516; Local Taxpayers & Public Safety Protection Act spta
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SUPPORT AND ADOPT THE RESOLUTION FOR THE
LEAGUE OF CALIFORNIA CITIES STATEWIDE BALLOT
INITIATIVE “THE LOCAL TAXPAYERS AND PUBLIC
SAFETY PROTECTION ACT”.
4B# 17,516
MTG. 2/17/04
DEPT. CM
DEPT. HD.
CITY ATTY.
CITY MGR
&
RECOMMENDED ACTION:
Support and adopt the Resolution for the League of California Cities (League) proposed
initiative “The Local Taxpayers and Public Safety Protection Act”, which is scheduled for the
November 2004 state ballot.
NO. 2004-059
ITEM EXPLANATION:
For more than a decade, the State of California has been taking away increasing amounts
of tax dollars that local governments use in funding everyday services such as Public
Safety, Parks and Recreation, and Transportation. The financial impacts of this shift total
more than $800 million to date from Cities, and that number continues to grow.
The League’s proposed initiative, titled “The Local Taxpayers and Public Safety Protection
Act”, would provide the following:
Requires approval by a majority of the electorate before a proposed state law
may take effect that reduces the sales, property, and vehicle license fees that
are allocated to the cities, counties, and special districts.
0 Makes it 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. Provides the
ability for a City to “opt out” of certain mandates if the State fails to pay in a
timely way.
0 Provides flexibility for state budgeting decisions, but requires voter-approval
on any future State Legislative actions that would reduce funding for essential
local services.
The League’s proposal is consistent with the City Council’s Legislative Platform, and is
intended to help provide protection of local revenues. It is the League’s intention of placing
this initiative, if it qualifies, before the voters in the November 2004 election. If approved,
this initiative would rollback the legislative changes after November 1, 2003, and would
require the State to enact Interim Statutes that provide financial compensation equal to
offset any impacts that may occur from the changes made. Attached is a copy of the
proposed Initiative (Exhibit 1) as well as the Resolution that outlines Council’s support
(Exhibit 2).
The City Council received a presentation from the League in January 2004, at which time
Council directed Staff to return with a position of support for Council consideration.
FISCAL IMPACT:
Unknown at this time.
EXHIBITS:
PAGE 2 OF AGENDA BILL NO. 17 516
1.
2. Resolution 2004-059 , which supports The Local Taxpayers and Public
The Local Taxpayers and Public Safety Protection Act
Safety Protection Act.
Exhibit 1
THE LOCAL TAXPAYERS AND PUBLIC SAFETY PROTECTION ACT
SECTION ONE. Short Title.
These amendments to the California Constitution shall be known and may be
cited as the LOCAL TAXPAYERS AND PUBLIC SAFETY PROTECTION ACT.
SECTION TWO. Findings and Purposes
(a) The People of the State of California find that restoring local control over local
tax dollars is vital to insure that local tax dollars are used to provide critical local services
including, but not limited to, police, fire, emergency and trauma care, public health,
libraries, criminal justice, and road and street maintenance. Reliable funding for these
services is essential for the security, well-being and quality of life of all Californians.
(b) For many years, the Legislature has taken away local tax dollars used by local
governments so that the State could control those local tax dollars. In fact, the Legislature
has been taking away billions of local tax dollars each year, forcing local governments to
either raise local fees or taxes to maintain services, or cut back on critically needed local
services.
(c) The Legislature’s diversion of local tax dollars from local governments harms
local governments’ ability to provide such specific services as police, fire, emergency and
trauma care, public health, libraries, criminal justice, and road and street maintenance.
(d) In recognition of the harm caused by diversion of local tax dollars and the
importance placed on voter control of major decisions concerning government finance,
and consistent with existing provisions of the California Constitution that give the people
the right to vote on fiscal changes, the People of the State of California want the right to
vote upon actions by the State government that take local tax dollars from local
governments.
(e) The Local Taxpayers and Public Safety Protection Act is designed to insure
that the People of the State of California shall have the right to approve or reject the
actions of state government to take away local revenues that fund vitally needed local
services.
(0 The Local Taxpayers and Public Safety Protection Act strengthens the
requirement that if the State mandates local governments to implement new or expanded
programs, then the State shall reimburse local governments for the cost of those
programs.
(g) The Local Taxpayers and Public Safety Protection Act does not amend or
modify the School Funding Initiative, Proposition 98 (Article XVI, section 8 of the
California Constitution).
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(h) Therefore, the People declare that the purposes of this Act are to:
(1) require voter approval before the Legislature removes local tax dollars
from the control of Local Government, as described in this measure;
(2) insure that local tax dollars are dedicated to local governments to fund
local public services;
(3) insure that the Legislature reimburses local governments when the
State mandates local governments to assume more financial responsibility
for new or existing programs; and
(4) prohibit the Legislature from deferring or delaying annual
reimbursement to local governments for state-mandated programs.
SECTION THREE. Article XIIIE is hereby added to the California Constitution to read
as follows:
ARTICLE XIIIE Local Taxpayers and Public Safety Protection Act
Section 1. State-wide Voter Approval Required.
(a) Approval by a majority vote of the electorate, as provided for in this section,
shall be required before any act of the Legislature takes effect that removes the following
funding sources, or portions thereof, from the control of any Local Government as
follows:
(1) Reduces, or suspends or delays the receipt of, any Local Government’s
proportionate share of the Local Property Tax when the Legislature
exercises its power to apportion the Local Property Tax; or requires
any Local Government to remit Local Property Taxes to the State, a
state-created fund, or, without the consent of the affected Local
Governments, to another Local Government;
(2) Reduces, or delays or suspends the receipt of, the Local Government
Base Year Fund to any Local Government, without appropriating
funds to offset the reduction, delay or suspension in an equal amount;
(3) Restricts the authority to impose, or changes the method of
distributing, the Local Sales Tax;
(4) Reduces, or suspends or delays the receipt of, the 2003 Local
Government Payment Deferral; or
(5) Fails to reinstate the suspended Bradley-Burns Uniform Sales Tax
Rate in accordance with Section 97.68 of the Revenue and Taxation
Code added by Chapter 162 of 2003 Statutes; or reduces any Local
Government’s allocation of the Property Tax required by Section
97.68 while the Sales Tax Rate is suspended.
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(b) Prior to its submission to the electorate, an act subject to voter approval under
this section must be approved by the same vote of the Legislature as is required to enact a
budget bill and shall not take effect until approved by a majority of those voting on the
measure at the next statewide election in accordance with subdivision (c).
(c) When an election is required by this section, the Secretary of State shall
present the following question to the electorate: “Shall that action taken by the
Legislature in [Chapter- of the Statutes of -3, which affects local revenues, be
approved?
Section 2. Definitions
(a) “Local Government” means any city, county, city and county, or special
district .
(b) “Local Government Base Year Fund” means the amount of revenue appropriated in the 2002-2003 fiscal year in accordance with Chapters 1 through 5,
commencing with section 10701 of Part 5 of Division 2 of the Revenue and Taxation
Code, adjusted annually based upon the change in assessed valuation of vehicles that are
subject to those provisions of law. In the event that the fees imposed by those provisions
of law are repealed, then the Fund shall be adjusted annually on July 1 by an amount not
less than the percentage change in per capita personal income and the change in
population, as calculated pursuant to Article XIIIB.
(c) “2003 Local Government Payment Deferral” means the amount of revenues
required to be transferred to Local Government from the General Fund specified in
subparagraph D of paragraph 3 of subdivision (a) of section 10754 of the Revenue and
Taxation Code in effect on August 11,2003.
(d) “Local Property Tax” means any Local Government’s January 1,2003
proportionate share of ad valorem taxes on real property and tangible personal property
apportioned pursuant to the Legislature’s exercise of its power to apportion property
taxes as specified in Article XIIIA, section 1. “Local Property Tax” also means any
Local Government’s allocation of the ad valorem tax on real property and tangible
personal property pursuant to Article XVI, section 16.
(e) “Local Sales Tax” means any sales and use tax imposed by any city, county,
or city and county pursuant to the terms of the Bradley-Bums Uniform Sales and Use Tax
(Chapter 1 of Part 1.5 of Division 2 of the Revenue and Taxation Code) in accordance
with the law in effect on January 1,2003.
(0 “Special District” means an agency of the State, formed pursuant to general
law or special act, for the local performance of governmental or proprietary fimctions
with limited geographic boundaries, including redevelopment agencies, but not including
school districts, community college districts, or county offices of education.
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(g) “State” means the State of California.
Section 3. Interim Measures
(a) The operation and effect of any statute, or portion thereof, enacted between
November 1, 2003 and the effective date of this Act, that would have required voter
approval pursuant to Section 1 if enacted on or after the effective date of this Act (the
“Interim Statute”), shall be suspended on that date and shall have no further force and
effect until the date the Interim Statute is approved by the voters at the first statewide
election following the effective date of this Act in the manner specified in Section 1. If
the Interim Statute is not approved by the voters, it shall have no further force and effect.
(b) If the Interim Statute is approved by the voters, it shall nonetheless have no
further force and effect during the period of suspension; provided, however, that the
statute shall have force and effect during the period of suspension if the Interim Statute or
separate act of the Legislature appropriates hnds to affected local governments in an
amount which is not less than the revenues affected by the Interim Statute.
(c) A statute or other measure that is enacted by the Legislature and approved by
the voters between November I, 2003 and the effective date of this Act is not an Interim
Statute within the meaning of this section.
SECTION FOUR. Article XIIIB Section Six (6) is hereby amended as follows:
SEC. 6. (a) Whenever the Legislature or any state agency mandates a new program or
higher level of service on any local government, the State shall annually provide a
subvention of funds to reimburse such local government for the costs of such program or
increased level of service, except that the Legislature may, but need not, provide such
subvention of funds for the following mandates:
0 (I) Legislative mandates requested by the local agency affected; 0 (2) Legislation defining a new crime or changing an existing definition of a
crime; or 0 (3) Legislative mandates enacted prior to January 1 , 1975, or executive orders
or regulations initially implementing legislation enacted prior to January 1, 1975.
(b) The annual subvention of funds required by this section shall be transmitted to the
local government within 180 days of the effective date of the statute or regulation or
order by a State ojicer or agency that mandates a newprogram or higher level of
service, or within 180 days of a final adjudication that a subvention of funds is required
pursuant to this section. For purposes of this section, the Legislature or any State
agency or officer mandates a new program or higher level of service when it creates a
new program, requires services not previously required to be provided, increases the
frequency or duration of required services, increases the number ofpersons eligible for
services, or transfers to local government complete or partial financial responsibility for
a program for which the State previously had complete or partial financial responsibility.
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(e) If during the fiscal year in which a claim for reimbursement is filed for a subvention
of funds, the Legislature does not appropriate a subvention of funds that provides full
reimbursement as required by subdivision (a), or does not appropriate a subvention of
funds that provides full reimbursement as part of the state budget act in the fiscal year
immediately following the filing of that claim for reimbursement, then a local government
may elect one of the following options:
(1) Continue to perform the mandate. The local government shall receive
reimbursement for its costs to perform the mandate through a subsequent appropriation
and subvention of funds; or
(2) Suspend performance of the mandate during all or a portion of the fiscal year
in which the election permitted by this subdivision is made. The local government
may continue to suspend performance of the mandate during all or a portion of
subsequent fiscal years until the fiscal year in which the Legislature appropriates
the subvention of funds to provide full reimbursement as required by subdivision
(a). A local government shall receive reimbursement for its costs for that portion
of the fiscal year during which it performed the mandate through a subsequent
appropriation and subvention of funds.
The terms of this subdivision do not apply to, and a local government may not make the
election provided for in this subdivision, for a mandate that either requires a local
government to provide or mod& any form of protection, right, benefit or employment
status for any local government employee or retiree, or provides or modifies any
procedural or substantive right for any local government employee or employee
organization, arising from, aflecting, or directly relating to future, current, or past local
government employment.
(d) For purposes of this section, “mandate” means a statute, or action or order of any
state agency, which has been determined by the Legislature, any court, or the
Commission on State Mandates or its designated successor, to require reimbursement
pursuant to this section.
SECTION FIVE. Construction.
(a) This measure shall be liberally construed to effectuate its purposes, which include
providing adequate funds to Local Government for local services including, but not
limited to, such services as police, fire, emergency and trauma care, public health,
libraries, criminal justice, and road and street maintenance.
(b) This measure shall not be construed either to alter the apportionment of the ad
valorem tax on real property pursuant to Section 1 of Article XIIIA by any statute in
effect prior to January 1,2003 or to prevent the Legislature from altering that
apportionment in compliance with the terms of this measure.
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(c) Except as provided in Section 3 of Article XIIIE added by Section Three of this Act,
the provisions of Section 1 of Article XIIIE added by Section Three of this Act apply to
all statutes adopted on or after the effective date of this Act.
SECTION SIX. If any part of this measure or its application to any person or
circumstance is held invalid by a court of competent jurisdiction, the invalidity shall not
affect other provisions or applications that reasonably can be given effect without the
invalid provision or application.
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Exhibit 2
RESOLUTION NO. 2004-059
RESOLUTION SUPPORTING THE “LOCAL TAXPAYERS AND PUBLIC
SAFETY PROTECTION ACT” INITIATIVE
WHEREAS, the state annually seizes $824 million of city property tax funds (ERAF),
seriously reducing resources available for local public safety and other services and increasing
pressure on cities to raise fees on new housing developments, increasing the cost of housing;
and
WHEREAS, in adopting the FY 2003-04 state budget the Legislature and Governor
confiscated local vehicle license fee backfill and redevelopment property tax funds that are
needed to finance critical city services such as public safety, housing and economic development;
and
WHEREAS, the FY 2003-04 budget also relies on a deficit bond financing program
opposed by the League that is predicated on a local property and sales tax swap that leaves
cities vulnerable to future losses if the state’s economic condition fails to improve; and
WHEREAS, the adopted budget assumes the state will continue to face an ongoing
structural budget deficit of at least $8 billion, putting local government financial resources at risk
in future years; 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, research conducted by the League of California Cities in recent years
indicates than an initiative that requires voter approval before the state government can
confiscate local tax funds would likely be supported by an overwhelming number of voters; and
WHEREAS, the voters of California are the best judges of whether funds traditionally used
to finance valuable community services should be diverted, confiscated, shifted or otherwise
taken by the Legislature to finance an ever-expanding state government; and
WHEREAS, the Board of Directors of the League of California Cities by unanimous roll
call vote at its July 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 Board of Directors has established a political action committee,
known as ClTlPAC, to raise private funds to finance part of the cost of such statewide initiative
campaigns; and
WHEREAS, the Board has requested that city officials across the state participate in this
private fundraising to finance such a ballot measure campaign; now, therefore be it
RESOLVED, that the Carlsbad City Council, in order to safeguard local revenues,
supports the proposed “Local Taxpayers and Public Safety Protection” initiative.
PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of the
City of Carlsbad, California, held on the 17th day of February ,2004 by the
following vote, to wit:
AYES: Council Members Lewis, Finnila, Kulchin, Hall and Packard
NOES: None
ABSENT: None
ATTEST: / I
Page 2 of Resolution No. 2004-059
Local Taxpayers and Public Local Taxpayers and Public Local Taxpayers and Public Local Taxpayers and Public Safety Protection ActSafety Protection ActSafety Protection ActSafety Protection ActSupported by!California State Association of Counties!League of California Cities!California Special Districts Association
Local Taxpayers and Public Local Taxpayers and Public Local Taxpayers and Public Local Taxpayers and Public Safety Protection ActSafety Protection ActSafety Protection ActSafety Protection ActProtects local government revenue!Includes city, county, a city and county, special district, redevelopment agency!Does NOT include school district, community college district, or county office of educationRequires a 2/3 voter approval from State Legislature to reduce, suspend, or delay certain local government revenueRevenue protection provisions are retroactive to November 1, 2003
What do these revenue What do these revenue What do these revenue What do these revenue protection provisions cover?protection provisions cover?protection provisions cover?protection provisions cover?Property tax revenuesLocal Sales TaxVLF, including backfill amount
What do these provisions What do these provisions What do these provisions What do these provisions NOT cover?NOT cover?NOT cover?NOT cover?VLF reduction if the Legislature fully offsets the reductionPrevent Legislature from shifting property tax from schools to other local governments or from returning ERAFBusiness License TaxTransient Occupancy TaxUtility User’s Tax
Big QuestionBig QuestionBig QuestionBig QuestionAre the triple flip modifications associated with the Governor’s bond proposal, which were enacted into law on December 12, 2003, subject to the retroactive provisions of this initiative?
State Mandated Local State Mandated Local State Mandated Local State Mandated Local ProgramsProgramsProgramsProgramsRequires State to annuallyprovide reimbursements to local governments for mandated services!All local government, including schools
Other IssuesBallot Box BudgetingCompeting Proposal on Ballot!California Home Rule Amendment
Questions?Questions?Questions?Questions?