PURPOSE:

The purpose of this memo is to seek Council�s approval of a resolution to support the proposed initiative for the November 2004 ballot entitled �The Local Taxpayers and Public Safety Protection Act� (hereinafter referred to as �ballot measure�).  This measure, if passed, would increase local control over local tax revenue by requiring voter approval before the Legislature can take away local government revenue.

BACKGROUND/ANALYSIS:

For over ten years, the California State Legislature has been taking away increasing amounts of local tax dollars that local governments use to provide essential services such as police and fire protection, emergency and public health care, roads, parks, and libraries.

The aggregate loss to Burbank from the State�s diversion of property tax alone over the last ten years is over $30 million dollars[1].  Now, the Governor�s proposed Fiscal Year (FY) 2004-05 budget could take away an additional $1.069 million from Burbank in the form of an Educational Revenue Augmentation Fund (ERAF) shift, thus by the end of FY 2004-05 bringing the total-to-date net loss to Burbank to over $34 million (excluding interest income).  In addition, the current permutation of the sales tax for property tax swaps (�triple flip with a twist�) is now involved in litigation with the City of Cerritos taking the lead and other cities, including Burbank, joining the suit.

Not only does the State�s continued rerouting of Burbank�s local revenues to balance its own budget hurt Burbank�s current and upcoming fiscal year revenue planning, but it also makes two and five year fiscal projections extremely difficult due to the uncertainty as to what the State will reimburse, or more frequently, take away.  In addition, many of the �temporary� diversions of local funds become permanent.  For example, the Redevelopment Agency�s alleged one-time ERAF shift in FY 2003-04 is again part of the State�s budget for FY 2004-05.

The ballot measure (attached as Exhibit A) is sponsored by the League of California Cities (League), the California State Association of Counties, and the California Special Districts Association.  Further support is expected from public safety and health advocates, taxpayer and business groups, seniors, and community leaders.

Examples of cities which have publicly endorsed the ballot measure are Los Angeles, San Bernardino, Sacramento, San Diego, Fresno, and Salinas.  Many counties have also publicly endorsed the ballot measure, including San Bernardino, Los Angeles, Monterey, and Fresno.

INTENT OF BALLOT MEASURE:

The ballot measure will provide the following:

• Requires voter approval before the Legislature can reduce local government revenues or take them for state, rather than local, purposes.

• Ensures that local tax dollars are available to fund local services such as police and fire, emergency and trauma care, parks, roads, and libraries.

• 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 agencies for the cost of those programs.

• Continues to provide flexibility for state budgeting decisions, but requires voter-approval on any future State Legislative actions that would reduce funding for essential local services.

The ballot measure will not:

• Raise taxes because it protects local revenue sources from State raids.

• Increase funding to local governments.

• Reduce funding that schools receive from local property taxes or funding that schools receive from the State.

• Reduce funding for other state programs such as highways or schools.

STATUS OF THE BALLOT MEASURE:

The measure was filed with the State Attorney General on December 10, 2003.  The Attorney General prepared the title and summary on February 4, 2004 (attached as Exhibit B).

The League and its initiative partners kicked off signature-gathering efforts early February with announcements at several press conferences in cities around the state. League regional representatives worked with their coalition partners to organize many of the press events, lining up locations and speakers from among public safety employees, police and fire chiefs, special districts, as well as city and county officials.

The campaign�s goal is to gather, before the April 15 submission deadline, the 1,000,000 signatures needed to qualify for the measure for the November ballot: 300,000 gathered through volunteer efforts, and the remaining 700,000 collected by paid signature-gatherers.

FISCAL IMPACT:

There is no fiscal impact by adopting a resolution supporting this ballot measure.

This ballot measure will require voter approval before the State can take away local revenue.  Supporting an effort such as this, is an important way in helping to prevent increasing amounts of local tax dollars being taken away by the State, where these funds could be used by the City to continue to provide essential services like police and fire protection, paramedic services, improved roads, parks, and libraries.

RECOMMENDATION:

Staff recommends that the Council adopt a resolution to officially support this ballot measure.

Attachments

go to the top