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HomeMy WebLinkAbout2010-02-23; City Council; 20137; Council Resolution in Support of Local Taxpayer Public Safety and Transportation Protection Act of 2010CITY OF CARLSBAD - AGENDA BILL 13 AB# MTG. DEPT. 20,137 2/23/10 CM COUNCIL RESOLUTION IN SUPPORT OF THE LOCAL TAXPAYER, PUBLIC SAFETY AND TRANSPORTATION PROTECTION ACT OF 2010 DEPT. DIRECTOR /£j CITY ATTORNEY /f^1 CITY MANAGER IA/-^ RECOMMENDED ACTION: To adopt Resolution No. 2010-038 supporting the ballot initiative to protect local taxpayer, public safety, and transportation funding that belongs to the City of Carlsbad from seizer or borrowing by the State of California. ITEM EXPLANATION: Local governments including the City of Carlsbad are entitled to and receive dedicated taxpayer dollars and funds for local public safety, transportation, redevelopment and other vital local services. The State of California has attempted numerous times in the past to seize or borrow billions of dollars of these local funds to address their State budget deficits. To combat this action voters have taken steps to protect local funds including the local government revenue protection measure in 2004 (Prop 1A) and the transportation revenue protection measure in 2006 (Prop 1A). Despite these measures the State has continued to find loopholes in these protections and has again acted to raid local government revenues. In 2009/10 the state borrowed approximately $5 Billion dollars in local funds to attempt to address State budget deficits. This included borrowing over $4,500,000 in Property Tax revenue funds this fiscal year from the City of Carlsbad. Fortunately an agreement was worked out that allowed the City to receive alternative funds to replace this loss with the understanding that the State will repay the loan in three years. However these constant attacks on local funds from the State leads to revenue uncertainty and puts local services in jeopardy. A ballot initiative has been proposed to close the loopholes that exist to prevent any further seizure or borrowing of local funds by the State. This initiative will provide protection to local taxpayers and protect vital local services and revenues. The City Council resolves that they support this initiative to have the State leave all manner of local property tax, redevelopment tax increment, transit, public safety, and transportation funds intact. FISCAL IMPACT: The State has taken local property tax revenue from the City in the past and borrowed a total of $4,500,000 from the City of Carlsbad in 2009/10. It is unknown the amount of funds that could be taken in the future if this initiative is not passed. EXHIBITS: 1. Resolution No.2010-038supporting the ballot initiative to protect local taxpayer, public safety, and transportation funding. 2. Attorney General of California's title and summary of the chief purpose and points of the proposed measure. DEPARTMENT CONTACT: Rob Houston 760-434-2958 rob.houston@carlsbadca.gov FOR CITY CLERKS USE ONL Y. / COUNCIL ACTION: APPROVED >cf DENIED CP CONTINUED D WITHDRAWN D AMENDED D CONTINUED TO DATE SPECIFIC CONTINUED TO DATE UNKNOWN RETURNED TO STAFF OTHER -SEE MINUTES D D D D 1 RESOLUTION NO. 2010-038 2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, IN SUPPORT OF THE LOCAL 3 TAXPAYER, PUBLIC SAFETY AND TRANSPORTATION 4 PROTECTION ACT OF 2010 5 5 WHEREAS, California voters have repeatedly and overwhelmingly passed 7 separate ballot measures to stop State raids of local government funds, and to dedicate 8 the taxes on gasoline to fund local and state transportation improvement projects; and 9 WHEREAS, these local government funds are critical to provide the police and lO fire, emergency response, parks, libraries, and other vital local services that residents H rely upon every day, and gas tax funds are vital to maintain and improve local streets 12 and roads, to make road safety improvements, relieve traffic congestion, and provide 13 mass transit; and 14 WHEREAS, despite the fact that voters have repeatedly passed measures to 15 prevent the State from taking these revenues dedicated to funding local government 15 services and transportation improvement projects, the State Legislature has seized and 17 borrowed billions of dollars in local government and transportation funds in the past few 18 years; and 19 WHEREAS, this year's borrowing and raids of local government, redevelopment 20 and transit funds, as well as previous, ongoing raids of local government and 21 transportation funds have lead to severe consequences, such as layoffs of police, fire 22 and paramedic first responders, fire station closures, stalled economic development, 23 healthcare cutbacks, delays in road safety improvements, public transit fare increases 24 and cutbacks in public transit services; and 25 WHEREAS, State politicians in Sacramento have continued to ignore the will of 26 the voters, and current law provides no penalties when state politicians take or borrow 27 these locally-dedicated funds; and 28 1 WHEREAS, a coalition of local government, transportation and transit advocates 2 recently filed a constitutional amendment with the California Attorney General, called 3 the Local Taxpayer, Public Safety, and Transportation Protection Act of 2010, for 4 potential placement on California's November 2010 statewide ballot; and 5 WHEREAS, approval of this ballot initiative would close loopholes and change 6 the constitution to further prevent State politicians in Sacramento from seizing, diverting, 7 shifting, borrowing, transferring, suspending or otherwise taking or interfering with tax 8 revenues dedicated to funding local government services, including redevelopment, or 9 dedicated to transportation improvement projects and mass transit. 10 " 11 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows: 13 , 4 1. That the City of Carlsbad formally endorses the Local Taxpayer, Public Safety and Transportation Protection Act of 2010, a proposed constitutional amendment, as outlined in the Attorney General of California title and , _ summary shown in Exhibit 2. ! <-, 2. That we hereby authorize the listing of the City of Carlsbad in support of thelo Local Taxpayer, Public Safety and Transportation Protection Act of 2010 and instruct staff to fax a copy of this resolution to campaign offices at 21 916.442.3510. 22 23 24 25 26 " 27 // 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 23rd day of February, 2010, by the following vote to wit: AYES: Council Members Lewis, Kulchin, Hall, Packard and Blackburn. NOES: None. ABSENT: None. ATTEST: LORRAINE MM/VOOD, City ClehV /(SEAtf Date: December 16, 2009 Initiative 09-0063 (Amdt. #1-NS.) The Attorney General of California has prepared the following title and summary of the chief purpose and points of the proposed measure: PROHIBITS THE STATE FROM TAKING FUNDS USED FOR TRANSPORTATION OR LOCAL GOVERNMENT PROJECTS AND SERVICES. INITIATIVE CONSTITUTIONAL AMENDMENT. Prohibits the State from shifting, taking, borrowing, or restricting the use of tax revenues dedicated by law to fund local government services, community redevelopment projects, or transportation projects and services. Prohibits the State from delaying the distribution of tax revenues for these purposes even when the Governor deems it necessary due to a severe state fiscal hardship. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: Significant constraints on state authority over city, county, special district, and redevelopment agency funds. As a result, higher and more stable local resources, potentially affecting billions of dollars in some years. Commensurate reductions in state resources, resulting in major decreases in state spending and/or increases in state revenues. (09-0063.) The Threat to Local Governments in California Presentation to the Carlsbad City Council February 23, 2010 Catherine Hill Regional Public Affairs Manager League of California Cities 2 Source: CaliforniaCityFinance.com computations from data from California State Controller (revenues). Does not include data from the following cities that failed to report: Beaumont, Gustine City, Loyalton, San Diego, Taft, and Tulelake. Utility Fees 25% Fees 15% Not Restricted 37% Other 5% Federal 4% State 4% Investments & Rents 2%Fines & Licenses 1% Taxes 5% Assessments 2% Property Tax 12% Sales Tax 8% Utility User Tax 4% Other Tax 8% Other 5% California City Revenues Individual cities vary 3 Discretionary Revenues and Spending Typical Full Service City Source: CaliforniaCItyFinance.com computations from State Controller reports 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Revenues Expenditures Property Tax Sales and Use Tax Police Fire ParksUtility User Tax Libraries Other Street & Roads Planning Franchises Hotel Tax Other Business License 4 California voters have overwhelmingly voted to stop state raids of local government and transportation revenues: roposition 42 (2002): 69% approval. Dedicated state sales tax on gas to transportation and transit improvements. roposition 1A (2004): 84% approval. Prohibits state from taking local government revenues. roposition 1A (2006): 77% approval. Prohibits state from using state sales tax on gas for non-transportation purposes. The Voters Have Spoken 5 Dysfunctional State Budget Process is Broken t's not simply the national recession that's the dreambuster. It's also the state's inability to govern itself. What ought to be done cannot be done in a state so out of control that its deficit, now $26 billion, grows every day by an estimated $25 million and its governor, Arnold Schwarzenegger, jokes that his finance director has been placed on a "suicide watch." -U.S. News and World Report, July 27, 2009 ere California a corporation, rather than a state, its officers would be playing tiddlywinks with Bernie Madoff in the federal slammer, having engaged in years of hide-the- pea accounting tricks, under-the-table loans and other gimmicks to cover up the state's perpetual operating deficits they will attempt to cover the gap largely with raids on local government funds,bookkeeping tricks such as shifting a month of the 2009-10 state payroll into the 2010-11 fiscal year, overly optimistic revenue estimates and wishful-thinking spending reductions 6 And threats to Local Government Services continue … In the 2009-10 fiscal year, the Legislature passed a state budget that: orrows approximately $2 billion in property taxes from local governments. akes $2.05 billion in local redevelopment funds, despite a recent Superior Court ruling that says these types of raids are unconstitutional. hifts $910 million in transit funding away from local transit agencies. 7 Revenue Instability Hurts Basic Services to the Public With few revenue options and the threat of state raids, city councils have few options to balance their budgets uts to law enforcement and fire protection. oad maintenance and infrastructure delays. losures and reduced hours for libraries, parks and other community facilities. 8 A Local Government Solution: The Local Taxpayers, Public Safety and Transportation Protection Act Headed for the November 2010 Ballot 9 Protecting Local Taxpayers and Vital Services 42 funds (HUTA) (such as Parcel, UUT, TOT) The Local Taxpayers, Public Safety and Transportation Protection Act would protect: 10 Protecting Local Taxpayers and Vital Services –Repeals actions taken by the Legislature between October 2009 and November 2010 that violate measure’s provisions Major Step Towards State Budget Reform The Local Taxpayers, Public Safety and Transportation Protection Act would: 11 San Diego County Contact For information or to request petitions contact: Catherine Hill League of California Cities (619) 295-8282 chill@cacities.org or www.savelocalservices.com