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HomeMy WebLinkAbout8.3 StaBudget/LocalGovFinPosition .... '... .. .. CITY OF DUBLIN AGENDA STATEMENT CITY COUNCIL MEETING DATE: April 26, 1993 SUBJECT: city position on State Budget/Local Government Financing ~(prepared by: Paul S. Rankin, Assistant city Manager) EXHIBITS ATTACHED: 1. ~Draft Report by League of cities/California State /Association of Counties dated March 26, 1993. 2. ABAG Resolution 2-93 3.~ABAG Resolution 1-93 RECOHMENDATION:~nsider various proposals and provide Mayor with any \\ input and consensus on the City'S posit~on before the Alameda county Mayors' Conference. FINANCIAL STATEMENT: Undetermined. DESCRIPTION: Several groups have been working on budget strategies, given the economic conditions within the state of California and Governor Wilson's proposal to shift significant portions of the local property tax to education. Several groups are beginning to take positions on the various proposals, including the Alameda county Mayors' conferenge. This group will discuss the various proposals at their May meeting. The purpose of this item is to summarize some of the current proposals and to allow an opportunity for the City Council to provide the Mayor with direction on any position to be taken on behalf of the city of Dublin. Leaaue of Cities Strateav Advisorv Forum The League has formed an advisory group consisting of representatives from 55 cities statewide. Representatives from Alameda county include: Mayor Elihu Harris, Oakland; Councilmember Linda Perry, San Leandro; and Mayor Ben Tarver, Pleasanton. The group presented ideas to the League of cities Board of Directors. The Board approved the advisory groups continued efforts on seven elements. .f The special advisory forum will be developing a proactive stance on the key issues. They have also been directed to provide recommendations for a balanced state Budget, without the transfer of property taxes. The seven strategic areas are as follows: . Oppose Property Tax Shift . 50% General Obligation Bond Approval . Extension by the state of the 1/2 cent Sales Tax . Provide for Redevelopment Reform . Provide for Workers' compensation Reform . Provide relief from state Mandated Costs . Explore constitutional protection for local revenues The city Council may wish to consider whether there are strong positions related to how any of these areas should be addressed. Leaaue Workina Group Draft Report Exhibit 1 is a Draft Report prepared by representatives of the League city Managers Department and CSAC County Administrator's. This document begins to consider the long term solution to financing the provision of government services. ITEM NO. E. J COPIES TO: CITY CLERK FILE~ .. .. Some of these longer term approaches include: . Consideration of a multi-year budget for the state of California . Development of a cap or limitation on state spending . Restructure the provision of services to reduce state spending . Pursue public discussion on the desired changes to the ~elationship between local governments and the State This report only provides a basic outline of very complex issues which face the State. Contra Costa County Proposal to ABAG The proposal was passed by the ABAG General Assembly as Resolution 2-93 (EXhibit 2). Contra Costa County has made a proposal to the Association of Bay Area Government (ABAG) to protest the state shift of local property tax to the state. The proposal urges all Counties to adopt ordinances which protect current allocations between agencies in the county. This would result in a refusal to transfer the monies if this is required by state Law. There are varied reactions to this proposal. Some officials have expressed concern with the potential legality, as well as a philosophical issue of not following state Law. Basically, when the voters approved PrQposition 13 in 1978, the control over the "local property tax" was effectively relinquished to the State. This proposal does result in a very pUblic demonstration against the State's action. The ABAG General Assembly also approved a resolution which took a general position on the state Budget (Exhibit 3). This resolution suggests the following: . The state should refrain from raiding local funds and develop long- term fiscal reform. . The State should refrain from using local funds and generate its own revenues or service cuts to balance the state budget. . The state should support a simple majority ,.voter approval on bond issues and taxes. Several of these themes are similar to those previously discussed. Staff would recommend that the city Council discuss any concerns or issues related to the state Budget which they want the Mayor to express in the city's position before the Mayors' Conference. a:426$stat.agenda#12 . - ; , ...... ~ - ~;~-l;-~; i~~ lj:~l LCAG4ilf4lll CI iio: Fh^ NU. 81b~b~ 5 """'I " ~ L Califofni" St!t! Association of Countie$ L,eague of CalifornIa CItIes County Administrative Offlcer(y.1tY MJJn~Qer WorkinQ ~r~~;; March 2e, 1993 Oraft Final Report Preamb.!! The Legislative Analyst has described California's system of government and particularly' government finance as -dY$functlonal-. The Governor}s pto~o$ed budget renes , dls~ropo"ionat.ly en citY, countY and special district rev.nues to close the IdentifIed stat. ' budget deficit. The Governor's proposal Is much more than a temporary budget reductiOn until the ecOnomy rebcund.a. It is I fundamental r.dlrection of local government resources which will hive a profound iMpact on the ability of cities Bnd counties to deUv., ~ubllc $eNlell. It is .1$0 I proposal whIch is counterproductive to the tole local govemmQnts muSt play In the economic recovlry Of California. ' It is for this reason that the Californi3 State Association of Counties end the League of California Cities assembled is working group of CoUmy AdmInistrative Offic.'" and City Managers to develop a proposal fot' th4 twO respective organizations to co'nslder and U$O in thtit effortl to offer altemstlves to the Covemor'. proposed budget. It ,.lntended to fadUtate t./'l. policy debate which Is occurring within CSAC and the L.ague and other le.d8rlni~ grout'l . and wilt ho~efuny .erve to move forw.rd tho economic reecvaty of Cahforn/a. I, t ~ '-ii . ~ ~ever'lue Enhl1neement FleeommeMd3'tlons The CAO/CJtv Manager Working Gr~up recommend. the foRowing local government budget restrUcturlng pn"cfpl..: ,. Local govlmment Ihould have ltable and p~dlctDblo fundIng IOUrcet to .upport municipal and county. wide servfee.. 2. CountY. wid. 'ervlcel should b. funded by caumy.wide generat.d ravenue aaUrCIS that Irl not In confUct with existing revenuI lourc... 3. RestructUring of the flsc,,1 relatfoNhlp betw01ln thl Itat' .nd local governments should afford mOt. local contrOl over funding levels. 4. Local govomment$ ,hould heve .ufftelent fl.xibrllty to anocat. revenue to local priority functions. Th. Working Group reoommendslmmedlau efforts :should be direoted toward the fonowlng: 1. Preventing any further shift of propertY tlX. 2. Agreement that when the economy turns. the state will gtv. back the propertY tax dIverted In fl~eal veer 92.3. ~' . :~.i .. ,".. ,....1.. ..... ....." ,.. ,.. ~.:s~. EXHIBIT 1 I" .~... -. ''- .-:~ t;- 1 j-j.:., llJt. . ... I'.... ~.: I ~C l..tA..S C [~:c:S ~HX he', 9..1 P.~ 3. The State shouid fataln the temporiry i 12 cent saies tax. \. 4. The State should ccnform the State Income Tax to the Federal Income Tax. 5. The State Should convert to a long-term, multi.year state budget. 6. The State should continue the "carry-over loss deduction. mor,torium. 7. The State should make. full review of Its -tax expenditures" (Ioo~holes). 8. The State sho\Jld consider a tobacco tox, tippler's t,>c (eJo:cept wit'le) and entertainment tax as revenue measures. . The Working GrolJe recommends the following issues should be acted upon regardless of the State actions on tn. budget. , . Reform of workers compensation system, includln; publiC satety employee~- ~. ~elmbursem.nt from federal government for immlgrl'tion and refuge. ..rviees~ . Restructurino Government Reccmmend8tlons~ I. A multl.vear croblem reQuires a multl.veer solutlQ.1'J. :. .. . Arty serlou. ettempt to restNctur. Itat8 and local governments In California must begin with flnanef,l stabnttY .nd predictability. The State of California hat faced I deficit In each of the last four (4) yea,.., In effe<:t rolling over the defiCit each year. The foundation of 'hr. ptOPOIII, tharefor.. I. for the ,tate to use. a multI-year budglt apptcach, be;lnnlng wIth the 1093/94 budget, such as that prQPosed by LOI Angelos County. This example calIS for the sWte to havt , balanced budget over I multl.year period and for there to be a ceiling or cap on 1he r:; growth In exp.ndltutes In anv one voer. Uncler thiS approacn, expenditure growth would be oapped It , % cer yeaf. B.ased upon materials contained in thl UCLA Business Forecast .nd report$ distributed by the Cornmlulon on St~8 FInance, the LOI Angelea CountY proposal . profects I budget IS follow.; , . ' .-::.:-:: ''';;:::'., :.::'::';';"':"":'~'~;:;"';;";;";.'.".\'" _. ...__._.....,.,,,,,___.i.h.....-.o:;:.:;:,=-;;:~:;:"~::;:;;;;;;::";;"-:::.J:... --..-.-. 5:;:;~ ',., .-:' .. _.. . y.' ..... ... _ .........._.... .,....._.,,;~._..':'~~ii:~~~-=-=........_'_.............v..,.'h'., ._.~_... ,,," --:~ .... ... ,.: :~_'.:'.. . :~~._ :-~;~~"':':::.;e:;", ".:iJJo.~~-.:.:.:=-.:::::-~~~:;:=:..l"~-~~-, .,;..'O .' I.. ....~,..~ ,.. . .............____.,...~~... ~.,'O'. :._.. . ""r.;;.lI......'I.'.h" ~,....-'......-..........................'I~~.~_.~........~:.. ..' .. .... ......... . .. . ... ;MtiHW~-" " ''''mI':II:~C::''' "'J:":.---"-'- .~.. - .' '. . :. I.'. .,'. . <I '.~~ ;.. .'itl1II r te-: ... u a '";~~;""!I'....t::.":'.":'.:~~w..:t:~.._:.;.::!..~., . . ... ..... . I . _. _~. l~- ...1JV _ ,.. _ ...._........ . ._..tI4_...Y.--........'III""'.t..,,-....'..' n. ..... ",,", tI' . . &1'" . . ......_..,.............. I ........ W ~._. .....~~_....,IIII.".....--"".._~...- '.... ........ p.._.._.".. .... ....'I.;,:,;:'BiUi . .' _........,~...._.._......__..--=.-:.,.~~;;:c;:; ':.. ;.. ;;.:.' .' . ;~..~., ::.,~~.. ;:;l J"':..... ;;.~..;;~;~.~.~:::;:: '1E:b-;:~S~~-:.~:' . .:. . .... ..,.. ,," . .y.... ....._.. ... ., .,,'. .-:.._.:..__.;....w......'w'_.._.........,~~~~~*! ...;.... ..,,'. ..... .:''',':;.. .. . !...:,....': ..~~.:.n.,.;!..*i.,~_..........u-:=:.~_..;........lf~.~..rv;~ .~':rtt .: .. .. '. . ...... ~ . .... ................. ...~. -:::x...lJ*:_...~..~.~;...~..I~II..~"~,.,....-...A.~ 'l.":;'''I'. ... ' .... '.......... ...... .... ~.. 10 ............ .........~..._---""..r::...........""'... ....'""-'" t ...... .': ". '.' . "~.;':. ....: '. . ~.'~ ':'~'.~ i.:. 1!~;':~ ~~ :~~';: :~-:~~L-';:o;.!~::f.~.:;:=::~;:;;::..~-_. TOTAL EXrE:'lOtT\iUS S40.' t41 '" <<U S4.2." 141.9 sa.. roTAL REVINtJISt S31.1 "9.3 141.0 $0.4 ~.2 $41:1 SGkt cd Uu Ta- U... U.. 16.4 17.1 17.1 IIJ hlMllll tatOlU Tat. 16.9 17.7 11.1 19.4 10.1 21.0 .. BlUlCorporaUoo Tax ..9 U '.4 6.0 tJ . 6.1 .",. Ok .9 .. 3 .9 .9 . .. VARIANCE <,2.'7) ($%.0> (SO.I) 11.0 $2.3 13.'7 CUMULAT1VE IMPACT ($2.'7) (SA.7) 1:3"') CS4.$) ($1.1) stA C\ '::: , """ I ~-: " '-"r:.' ~,.. ~, '\11'.-.... _:~.; , . 'w' : .::: \;1' : 1 ~~8~ ,Iv' v'.V. : n~/ot:: I -...Iv >oJ " -. A.. multi, year budget would enable the S 'ate of Call rorni; to properly provide for a business plan, strategic plan, capital improvement .,Ian. and flnantia! plan for state government. 8y placing a cap on expenditure growth, tht MUlti-year bUOQef provides accountability to the taxpayers of California and encourages a pur"lic debate over policy issues. A 1 % eap, as used in thls example. would plac! tiQhter restrictIOns on tM(> State's expenditure growth tl'lan is currently impQsed by tMe Gann Limit and tfgh\;r than the eontrols envisioned by Proposition '65. II. Hl'JW does the ~t3te live within 8 OM Clue, 'nt exoe"o:t.l.!.tu~owth ":MU At the loea/level. Soard, of $I./I::lerv;sors and City C )uncils have been (:a(t'd w,~h diHieult policy decisions since the edoptlon 01 Proposition 13 fifttten years IgO, Ouril'\g thos,," fift.tn years, locally elected officials have been extremely creative in stratchln~ $care resourc~' to meet the e"'9r~rQwi"g demand for seNlen. Arva, In which t"'I8 State of California COLld loo~ to recluce expenditures in order to stay within the growth limit include: L Reduce expendituru through the consolidatio' Indlor ellml" 1tion of ,tate agencies. bOirds and eommissions. . I .. ~ ,.. . . . A. , 992/93 St!tt LeQislatur~ 80ards and Cor,1missions Working Group r.eporttl: the Conference Committee on Senate Sill '28' B. Recommendations contained in a rel'ort submltt.d by Senators Boatwrignt, McCorCluodalt. .n~ Thompson , C. Conform California income tax policle.3 with feder!1 tax polJc"~s, piggybackJng gn the federal collection Iystem and mike appft"pril!lte reduet10nt Slid eonsolkbtion. in staff ~.:";~ t' " Impl'ov. program effleionc:les and se~e. defivery by ,~ncouraOlng c6nsolldatlons/re1,orms at the local level. A. B. C. ,:,,"!f ';. - .0. City and County. cONolidatlons/cootdinatlon Special District consolldatlons/~oordlnation Eatlbllsh a Single CQvrt system Create ine.ntlves for coordInated services "', ... J. Adopt a polic;y 01 aggressive esset manegement. A. Treat human resources as an asset. B. Llvlrage real prop.rty and other fixed SSSlts to maxirr In financial c.'pabilitV of those asseu ,...... ,'~ 4. Control ulary and benefit costs. Privete SACtor eom~arlions for salarylbeneflt 5tructure Local govQrnment comparison. .' ' . Reduce administrative positions such as Public InformatIon OffIcers Ind _gency legel coun.cls ~. Increase CIIl$$fOom fundIng and reduce l"tIte obligations to sehools b. r18tfuOt'Jril'lg lChool admInistration. . ...:.'" ~ r": t'l .,,{. ~ . A. e. c. - , -~--' "-~. - ...... ...... ow'"' ........ :;,~~ _:..> .-.-.... '"oJ ~ 1 ~:.:: - -, ~,I~, ~..l ?,04/05 ~ --"\ A. E~minate or signlf:c:3Mtly reduce the Co:.;nw Office of Ecuca:ion e. Consollda~e or coordinate acmini~tration of school dl~triC't$ to reduCe admin;~trative statf and im~rove economies of seale in administration. purchasing, budgetIng and ether administrative matters. III. Wh3t About Suuewl'31 Chanoes to the Staf~ and local Governr'M/'If Relations? In tneir rtport on the 1993.~d. bu('lS',.c', the Legislative Analyst's Office has rliS-lId I number of Issues for restructuring the relationshio between stat. and local governments. 11'1 Part IV: Rc;strvcturing Californl~ Govc:rnment, the LAO tlnd~ that .California'.s exi.stlng ':iystem' of government is dysfunctIonal. and recommends a variety 01 changes to tha responsibility of program delivery. accountablllW for rev.nu. generation and methodOlogy In the delivery of government servicea2. The LAO repori"provide, a basis for e vIgorous public polley de bats end tl'll 1oundatlon for struetural ~hange in the state and local government relationship in California. J'ointly sponsor a public. forum to discuss the LAO report and its recoznmcl1datiol:1S for resuuctutinc stata md local government in C3litornia. along with city and 'ouncy recommendations. IV. Whar AMur Structural CharHzes to~ Srare and Loc.:al Govtrnmtnr Rel3tions? It has been determined by the Worlc.ini Ciroup that thla wue should be .ddtc$$ed separately. Th. Le.que will continue to work with CSAC. scbool.5 and others in cxplorini poc:en~ constitutional proteetiol1S. ' ~ountvwto! .Auessment,. T!XlnQ Authority a"d Al"ll"le,c.tlon HeeOn'lm,nd8t1o"S ' 1. Cities can support counties havlnQ . greater ablllt)' to levy benefit usessments, particularly in areas that might benellt both citlas and counties. luch IS poliCY and libraries. However, county assessments. ,hould not ~ levied where citiea elreldy have essessments in pl~ce witholJt concurrence with the city. AnnexatiOn Iss\Jn wiU iargety bicome non.lsaues If the real problems can be sotved vIa a constitutIonal amendment. Considetation Is needed of.. central clearlnghouse .to deal with the multiple lurlsdictiol"ls attempting to .uthorize new taxin~ authOritY. 4. 60nefit lS$eSSment$ and all other sources of new rev.nue should not be eonsid.,.d I tepleeement fot',:Iroperty t.xes. I' I ~:.1": ,.' .(" 2. 3~ , . .. . , .."- , l The 1993~94 6udget: PerspeClive~ and Issues: L.;islatlve AAalY$tl Offic" S.Ct,mento, Celitornl. I Making Govetnment M~ke S'!r'lse: A More Rational Structure tor State and L.oc~1 Government. Ibid. "., " Apr 22.1993 10:09AM FROM .. TO 98336651 .. P.03 RESOLUTION 2w93 .------- , RESOLUTION OF TIlE GENERAL ASSE:MBLY OF THE ASSOCIATION OF BAY AREA GOVERNMENTS URGING LOCAL CONSENSUS IN OPPOSITION TO PROPOSED curs IN LOCAL FUNDS BY THE STATE LEGISLATURE WHEREAS, The Association of Day Area Governments is strongly opposed to the Governor or the Legislature moving any property tax revenues, including but not limited to redevelopment funds, or any other revenues that suppon local services; THEREFORE, now be it resolved by the General Assembly of the Association of Bay Area Governments that the counties are urged to adopt ordinances to protect current allocations of property taxes for counties, cities, school districts, special districts and redevelopment . agencies; and BE IT FURTHER RESOLVED that the cities are urged to adopt resolutions supporting such ordinances; and BE IT FURlHER RESOLVED that all other councils of governments in California, and their member cities and counties. be urged to take similar action. The foregoing resolution was passed hy the General Assembly of the Association of Bay Area- Governments this 25th day of March, 1993. J:2M' President ~ if~~ Revan A. F. Tranter Secretary jTreasurer r"A/~JIB'T [}\rll ;2. I I I I 111 '-. ~, ~._ ,.'" ..,;".'" ",..",,- . '.' . ..4.. ~r.: .'; " . '.1' ! . ..'..' :,.' ',' , . . .': " ,. -' . ~', '. .. " , '.I" I ". " ........:.,,'..> .. . , " ," ~" , '" ' . " , . . ~, ; '1 " I .' , : /' .' ". '. .'. ...... .'. ,,;/<):"',}~ h,:,;/';",;;,;":';':;!!)'{:'}':,,':~i;~i~~J;:: '. . . , ", . ,", . .' "'.' " " "',, "!." ";' " .Jp_.~, "," '.........:....-.:..;;.....,..iiiiiIIiili'...~.~. ". ,'. , . ' ': , ',.,. '.:.. ..,._.,,,;:\';;,::,,,;,,;_~:,,,,,,,,,,~,,'':'~\'';'f;'-.,,,,:,,.. ,....~~v.:.......<', ._..;....... "...~...".,...~....,..-:,....... -it .-",--"", - -,. .. · · l .' "'~'I." _.,", : '.1;.' ,;...:,....",: ", 'J ' \ o!' . ,1 _, .i"', -..~\. U .,' ,~ ~ I . I ! .' .", " , , '..... ',' ", . .,.; '. 't.' ,. I, j I , " .l, . RESOLUTION 1.93 RESOLUTION OF THE GENERAL ASSEMBLY OF THE ASSOCIATION OF BAY AREA GOVERNMENTS IN OPPOSITION TO PROPOSED CUTS IN LOCAL FUNDS BY THE STATE LEGISLATURE WHEREAS, the State of California falled to recognize the depth of the recession; and WHEREAS, the State of California for the past several years has overestimated income and sales tax revenues; and WHEREAS, the State of Califomin continued to pass legislation assigning programs to local governments without regard to costs in a faltering economy; and ' WHEREAS, the State of California is trying to correct a serious budget deficit through Draconian cuts in funds allocated to local governments; and WHEREAS, cities and counties provide essential services, including police and fire protection, to citizens of the State of California; and WHEREAS, cities and counties throughout California arc suffering ~cvcrc financial distress, and several are on the brink of bankruptcy; and WHEREAS, cities and counties are required to provide State.mandated services without adequate funding: and ' WHEREAS, cities have been contributing more than $240 million a year in local dollars to the State General Fund through cigarette taxes, trial court funding, and other fees levied in the last two years; and WHEREAS, property taxes and vehicle license fees represent a substantial component of the funding base of cities, allowing them to continue providing essential services, including police and fire protection; and WHEREAS, property tax. monies were dedicated to local governments after the passa.ge of Proposition 13 as the permanent, stable and long~term solution to local finance: and WHEREAS, the State of California has bridged its budgetary deficits in previous years by raiding local funds, such as liquor license fees, highway carriers uniform business taxes, business inventory property tax relicf, cigarette taxes, drinking water regulation fees, booking fees, and property tax administration charges and fines and forfeitures; and . EXHIBlT 3 "'~, 'Apr 22, 1993 10: 09AM .. ..6651 P.02 GENeRAL ASSEMBLY RESOLUTION 1-93 Page 2 WHEREAS. raids hy the State Legislature on local funds this summer would gut support for police and fire protection with no immediate source of fiscal relief, thereby compromising public safety; and WHEREAS. the Executive Board of the Association of Bay Area Governments on June 18. 1992 expressed opposition to such practices by the Governor and the Legislature; WHEREAS, there is a need for a long~t~rm budgetary and constitutional reform at the State level; and WHEREAS, the General Assembly of the Association of Bay Area Governments adopted a resolution endorsing unity for fiscal reform on March 15, 1991; and WHEREAS, the Executive Board, in cooperation with school districts, subsequently adopted on June 13, 1991, a declaration of fiscal interdependency and statement of guiding principles for reform at the State and local level; NOW, TIlEREFORE, BE IT RESOLVED that the Association of Bay Area GovernrnenU calls upon the Governor and State Legislature to refrain from raiding local funds in an effort to bridge the budgetary gap in the short term and calls upon legislators to develop responsible, long-term fiscal and constitutiona.l reforms; and BE IT FURlHER RESOLVED that the State, in response to its own budget crisis, should not use local funds to support State activities but sho~lld cut State spending, close tax loopholes and raise its own revenues and continue the current 1/2 cent sales tax; and BE IT FURTHER RESOLVED that the Governor and .the State Legislature support a simple majority on bond issues and taxes where the law requires such a vote, make specific revisions to the tax system to better meet the needs of the California economy in the future; and BE IT FURTHER RESOLVED that all unfunded State mandates should be suspended. 4:iati J-alffi' The foregoing resolution was passed by the General Assembly of the Association of Bay Area Governments this 25th day of March, 1993. ~~ uT~ President Revan A F. Tranter Secretary /Trc~urcr