HomeMy WebLinkAbout4.08 LeagueCalifCitiesAB2797
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CITY CLERK
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AGENDA STATEMENT
. CITY COUNCIL MEETING DATE: September 17,1996
SUBJECT: Request from the League of California Cities to Support AB 2797
(Aquiar) Allowing Local Agencies to Retain Growth on Property
Tax Education Revenue Augmentation Funds (ERAF) Beginning in
1997-98. Report Prepared by: Lou Ann Riera-Texeira, Assistant to
the City Manager
EXlDBITS ATTACHED:
1) Letter from the League of California Cities
2) Draft Letter to Governor
RECOMMENDATION: '-LA>?' Authorize the Mayor to send a letter of support (Exhibit 2)
FI~ANCIAL STATEMENT:
Passage of this legislation would return to cities a portion of the
property tax lost in the early 1990s. Current estimates indicate a
return of approximately $150 million in revenue to cities, counties
and special districts in Fiscal Year 1997~98. The funding to cities
alone is estimated at $30 million.
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During the early 1990s, the City of Dublin experienced reductions in
a number of revenue sources as a result of past state budget cuts.
Revenues affected included Motor Vehicle In-Lieu Fees, Vehicle
Code Fines, and most significantly, the transfer of local property
tax to the state. As of 1995-96, it is estimated that the City of
Dublin has lost over $1.4 million (approximately $360,000 per year
since the initial cut in 1992-93) as a result of the state property tax
shift. As a result of the freeze to the EDAF, it is estimated that the
City of Dublin looses approximately 8.5% in property tax per year.
DESCRIPTION: The 1996 legislative session came to a close on August 31, 1996.
The Governor has until September 30, 1996, to sign or veto legislation presented during the 1996 session.
Cities have a number of major issues which were presenteQ. furing the 1996 legislative session. Three of
the most significant issues involve the return of revenues to cities and counties.
One of the most critical issues being considered is AB 2797. This measure would allow local agencies to
retain the growth on the property tax revenues transferred to the Tax Education Revenue Augmentation
Fund (ERAF) beginning in 1997-98. As indicated above, this bill would result in an increase in revenues
of ~pproximately $150 million to cities, counties and special districts beginning in 1997-98.
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ITEMNO.~
H/cc-forms/AS 2797.doc
AB 2797 represents not only a vehicle to return local revenues to cities and counties, but is also symbolic
of a greater policy issue. It is ti~at the state and local governments. again become partners as
opposed to adversaries. This mBz.e is viewed as a way to begin to retllP'the property tax lost in the
early 1990s, and will go along way to heal some of the deep wounds between governmental institutions.
AB 2797 has overwhelmingly passed both the Senate and Assembly floors and now awaits the Governor's .
signature. The League of California Cities has asked cities to write to the Governor in support of AB
21!Z1. Staff recommends that the City Council authorize the Mayor to send a letter to the Governor
supporting AB 2797.
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LEAGUE OF CA CITIES
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FAX NO. 9166588240
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P.Ol
League of California Cities
Urgent - Please Deliver Immediately
September 6. 1996
TO: Mayors, Council Metnbers, City Manage~, police Chiefs and Fire Chiefs
(Please Route)
RE: AD 2797 (Aeuiar) - Cap on Transfer of E~AF Revenues
Passes Senate and Assembly
Urge Governor's Sign9tllre
Lt:gislation, hR 2797. allowing local agencies to retain the growth in property tax revenues
transferr~d to ERAF beginning in 1997-9"8, has overwhelmingly passed both the Senate and
Assembly floors and now awaits the Governor's signature.
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Cities should contact the Covernor AS SOON AS POSSIBLE and indicate their support
for AD 2797 and ask for his signature on the measure.
Please use the attached sample letter to urge the Governor to sign this bill. It Is ycry
important for the Governor to hear front cities on this important legislation. This mea~ure
to return a portion of the property ta~ lost in the early 19908 win go a long way to helping
state: and local gmrernroe:oJs become partncl"s rather than adversaries once again.
The Governor has until September 30 to sign or veto the legislation. however cities are asked to
send their letters right away.
With AB 2797, the amount of property tax transferred would be capped for each local agency at
the amonnt transferred in 1996-97. Legislative staff estimates that this will reduce the total
amount transferred in 1997-98 by up to $150 million" The savings ro cities from this (;ap on the
amount afproperty tax transferred would h2 about $30 million in 1997-98. Savings in future
fiscal years would depend on the growth in assessed value.
For :further details, see Legislative Bulletins #32 and #31.
Thank you for YOill' efforts and please fax a copy of your letter to the League at 916/658-8240.
.ERENCI! REGISTRATION OFPICE
POST OFFICE B07\ 1::118
LAFAYETTE:, CA 9-1549
(610)283-2113
FA-I( C51 0\ 263.7833
HJ;;AOQUAnTERS
1400 K STREET, SACRAMENTO. CA 95814
(916) 658-8200
FA\( (GiS) 658-8240
SOUTHERN CALIFORNIA OFfiCE
502 EAST HuNTINGTON DR" SUITE C
MONROVIA CA91016
(B18) 305.1315
FA'< (1319) 305.1346
EXHIBIT 1
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September 17, 1996
The Honorable Pete Wilson
Governor
State Capitol, First Floor
Sacramento, CA 95814
Dear Governor Wilson:
On behalf of the City of Dublin and our residents, I urge your support and signature of A6
2797 (Aquiar), recently passed by both the Senate and the Assembly.
By signing AS 2797, you will help to begin restoring the estimated $1.44 million lost in
property tax by the City of Dublin since 1992-93. More importantly, you will help restore
public services, including law enforcement, parks and libraries, which are vital to the .
residents of this community.
Local governments provide numerous essential public services and programs that have
been cutback or eliminated because of the loss of property tax revenues. Cities
throughout the state must maintain an adequate revenue base to be able to provide
critical services to the community.
This measure to begin the return of the property tax lost in the early 1990s will go along
way to help state and local governments become partners again rather than adversaries.
The message from the citizens of California is very c1ear--they want their government
institutions to work together and not at cross-purposes. AS 2797 is a step in this direction.
I respectfully request your signature of AS 2797. Thank you very much.
Sincerely,
Guy Houston
Mayor, City of Dublin
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EXHIBIT 2