Voters could force Sacramento’s hand in November if a proposition that would make it illegal for the state to either borrow, redirect, or seize revenue dedicated to local government qualifies for the ballot.
The League of California Cities along with the California Alliance for Jobs and the California Transit Association are in the process of collecting more than a million signatures needed to qualify the Local Taxpayer, Public Safety, and Transportation Act of 2010 for the ballot.
In a summary of the ballot measure, League Executive Director Chris McKenzie noted the state has continued its “irresponsible” practice of taking and borrowing local taxpayer dollars and dedicated transit funds. The state seized $5 billion this fiscal year in a bid to balance the state budget in lieu of cutting back expenditures which is what local jurisdictions are being forced to do.
Previous initiatives passed by the voters prohibit such borrowing but the state has found loopholes to get around the laws put in place by voters. The new measure plugs all of those loopholes and more.
McKenzie noted that the state for years has continued its cycle of borrowing with no clear plan to pay back the money despite promises to do so.
This fiscal year the taking of local money increased substantially just as local jurisdictions were getting hit by The Great Recession. As a result cities across the state have been forced to cut back with many closing fire stations and handing police officers pink slips.
If the voters take away the state’s ability to raid local funds, they will no longer be able to put off basic restructuring of how they do business by relying on the swiping of local revenue to plug their budget gaps.
Since the early 1990s, as an example, the state has taken almost $18 million from the city of Manteca alone.
Manteca this fiscal year alone lost $7.6 million to the state - $1 million in property taxes and $6.6 million in redevelopment agency funds.
The city was able to securitize the $1 million which now means the state can’t wiggle out of its commitment to repay it. The city joined other municipalities in putting together a bond measure that would give them the money now. That means instead of the state repaying the cities and counties in two to three years they would have to repay the bond holders. While the state has routinely reneged on paying back money it said it would in past years that was taken from local government, the courts have consistently ruled the state must pay bond holders first.
If the city didn’t securitize the money the state took, it would have had to resort to laying off 10 to 12 more municipal workers in the current fiscal year.
The RDA money was set aside for various Manteca economic development projects such as interchange improvements that the state will no longer fund. Ironically, the state is requiring local jurisdictions to come up with the money for such improvements with RDA taxes being one of the few ways to pay for the share that is borne by existing residents without seeking bonds.
The California Redevelopment Association won a court lawsuit in April blocking such a raid. The state dropped its appeal in that lawsuit making it binding but then simply turned around and changed the language and passed a new bill. The CRA has since field another suit in responded to the new legislation.
The proposed ballot measure would protect locally imposed taxes such as motel room taxes, parcel taxes utility taxes, and sales taxes such as Measure K (countywide transit tax) and Measure M (Manteca’s public safety tax) from being touched by the state.
The ballot measure would also prohibit the borrowing or stealing of public transit funds, Proposition 42 gas tax, HUTA gas tax, local sales tax, or redevelopment agency funds.
Stephen Qualls, the Central Valley Regional Public Affairs Manager for the League of California Cities, will present the council with an update on the ballot measure campaign on Tuesday.
The City Council meets at 7 p.m. at the Civic Center, 1001 W. Center St.
