DATE: January 13, 2004
TO: Board of Supervisors
SUBJECT: Resolution Supporting the Proposed Statewide Ballot Initiative to Amend the California Constitution, Entitled “The Local Taxpayers and Public Safety Protection Act”
The counties and cities throughout the State have established a strong coalition, represented by the California State Association of Counties (CSAC) and the League of California Cities, to draft a proposed statewide ballot initiative to amend the California Constitution. The proposed initiative is entitled “The Local Taxpayers and Public Safety Protection Act.”
The main purpose of the proposed statewide initiative is to protect local tax dollars from future raids by the State Legislature to use for State purposes rather than for local services without a vote of the people. For more than a decade, the California State Legislature has taken increasing amounts of local tax dollars from local governments. These raids on local revenues have made it increasingly difficult for local governments to provide essential services to the residents who pay the local taxes. The impacted essential services include, but are not limited to, public health and safety, sheriff services, fire protection, emergency services, public health care, roads, parks, libraries, and clean water.
The adoption of a Resolution supporting this proposed statewide
initiative will send a strong message to the residents of San Diego
County that the Board of Supervisors is committed to protecting their
right to decide whether their local tax payments should be taken by
the State Legislature for State purposes, or kept by their local
governments to be used for essential local public services.
Supervisors Cox and Horn
Adopt the following Resolution:
Resolution Supporting a Statewide Ballot Initiative Entitled “The Local Taxpayers and Public Safety Protection Act”
For more than a decade, the California State Legislature has been taking away increasing amounts of local tax dollars that local governments use to provide essential services like police and fire protection, emergency and public health care, roads, parks, libraries and water delivery. In fact, through good times and bad, the State has been taking away billions in local tax dollars each year – forcing local governments to either raise local fees or taxes to maintain services, or cut back on critically needed services.
State-Local Fiscal System Broken. There is widespread agreement that the State-local fiscal relationship is broken. One of the reasons is because State leaders no longer respect the difference between State and local tax revenues. In recent years, the State Legislature and governor have approved laws that divert, use or delay the payment of local tax revenues that are intended for the use of local governments that pay for public safety, public health, park, library, street maintenance and other vital community services.
Local Funds Drained for Higher State Spending. Since 1991 more than $30 billion of local property taxes have been drained from counties, cities and special districts. Even in years of State budget surpluses, the State has used these funds to finance its constitutional funding obligation to public education, allowing it to increase State general fund spending for other State programs. This has come at the expense of vital local public safety and other services.
State Shifts Costs to Local Governments. In recent years, the State also has shifted costs for State-sponsored programs and delayed constitutionally required reimbursements to local governments for State mandated programs and services. In the last two fiscal years, the State has “deferred” over $1 billion in constitutionally required reimbursements to local governments for mandated services and programs. This cost burden must then be paid with local taxes by local government that could be used for important local services.
For example, in 1983 the State of California mandated counties to provide county medical services (CMS) for medically indigent adults, and beginning in 1989 failed to reimburse the counties for the costs to run CMS. The County of San Diego was forced to go to court to get its funding to which it was legally entitled, which ultimately resulted in a 1997 California Supreme Court ruling for the County stating that the State owed the County reimbursement for its CMS costs. The State continued to fight the County over how much it owed the County, and it was not until the end of 2003 that the Court of Appeal ruled that the State owes the County $3.5 million in reimbursement for the operation of CMS. The County is now in the process of finalizing the court judgment so that it could get paid the $3.5 million in reimbursement for costs expended over 13 years ago because of this State imposed mandate.
Constitutional Protection Needed Now. CSAC and the League of California Cities have formed a coalition to sponsor a ballot initiative in November 2004, entitled the Local Taxpayers and Public Safety Protection Act, to put the voters in charge of whether local tax dollars should be used to fund State services. It will not raise taxes. It will not repeal laws the State has already passed. It will not require the return of property taxes already taken nor affect funding of schools. It will not prevent structural reform of the fiscal system – simply require that structural changes be planned collaboratively by State and local leaders and approved by the voters.
The proposed statewide ballot initiative will do two simple things:
- Public Vote Required. Require approval by a majority of the electorate before a proposed State law takes effect that reduces the sales, property and VLF funds of counties, cities and special districts. Flexibility is provided to reduce the VLF and replace it with substitute revenues (i.e., a “backfill”) without voter approval; and
- Reimburse for Mandated Costs. Reinforce the obligation of the State to reimburse local government in a timely way when the State imposes new mandated programs or higher levels of services on local government, protecting local governments from hidden cost shifts. Allows local governments to opt-out of performing most State mandates if the State fails to pay in a timely way. This will enable local governments to stop using its own limited revenues to pay for services that the State is obligated by law to pay.
The 2004 Local Taxpayers and Public Safety Protect Action would increase local control over our local tax dollars. This measure would let the voters have the final say on proposed actions by the State Legislature that would further reduce local government funding. It would protect the vital local services that California residents rely on each and every day – such as public safety and emergency case, roads, libraries, parks and transportation – by requiring voter approval before the State could reduce funding for local services or shift more costs to local governments.
What This Measure Does:
- 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 like police and fire, emergency and trauma care, parks, roads, libraries and water delivery.
- 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 governments for the cost of those programs.
- Allows a local government to opt out of performing a State mandated service if the State is not going to fulfill its legal obligation to reimburse local government for the cost of performing the mandate.
- Provides flexibility for State budgeting decisions, but requires voter-approval on any future State Legislature actions that would reduce funding for essential local services.
What This Measure DOES NOT Do:
- Does not raise taxes. In fact, this measure will help decrease pressures for local fees and taxes by protecting local revenue sources from State raids.
- Does not increase funding to local governments. Simply prevents the State Legislature from raiding future local government funding.
- Does not reduce funding that schools receive from local property taxes or funding that schools receive from the State.
- Does not reduce funding for other State programs like schools or highways.
Questions and Answers:
A Question & Answer fact sheet is attached that addresses many of the questions associated with this proposed statewide ballot measure.
We urge your support.
Supervisor, First District
Supervisor, Fifth District