Protect Business and the Economy

THE PROBLEM: STATE RAIDS AND BORROWING OF LOCAL GOVERNMENT AND TRANSPORTATION FUNDS HURT OUR ECONOMY AND BUSINESS CLIMATE.

California voters have overwhelmingly passed separate ballot measures to prevent the State from taking local government, transit and transportation funds.  Despite this, last year the State passed a budget that borrowed and took approximately $5 billion in city, county, transit, redevelopment and special district funds, and the State continues to threaten to borrow or take billions in transportation funds every year. The borrowing and raiding of local government and transportation funds jeopardize our local economy and business climate:

• Raiding and borrowing local government funds hurts the services businesses rely upon and leads to increased pressure for local fees and taxes on local businesses. Local governments provide the services and infrastructure that are critical for local economic growth and a healthy business climate, including land-use approvals, local streets, roads, sewer, water and other infrastructure, police and fire protection and more. When local funds are reduced, it slows business development and increases pressure for local fees and taxes to pay for these services.

• Raiding or borrowing transportation funds immediately harms the economy.  Every $1 billion spent on highway construction generates $5 billion in economic activity and creates 18,000 jobs.  Additionally, businesses rely on a reliable transportation and public transit network to move their employees to work and products to the market.

• The State raid of $2+ billion in redevelopment funds this year could otherwise support up to 198,000 full- and part-time jobs in the construction and related industries. Redevelopment activities help support new business opportunities in local communities – when redevelopment funds are raided, it stymies job creation and business development.

PROP. 22 IS THE SOLUTION:  PROHIBIT THE STATE FROM RAIDING LOCAL GOVERNMENT, TRANSIT AND TRANSPORTATION FUNDS.

Prop. 22, the Local Taxpayer, Public Safety and Transportation Protection Act, on the November 2010 statewide ballot, would:

•   Prohibit the State from taking, borrowing or redirecting local taxpayer funds dedicated to public safety, emergency response and other vital local government services. Prop. 22 would close loopholes to prevent taking local taxpayer funds currently dedicated to cities, counties, special districts and redevelopment agencies. It would also revoke the State’s authority to borrow local government property tax funds.

• Protect vital, dedicated transportation and public transit funds from State raids.  Prop. 22 would prohibit the State from redirecting, borrowing or taking the gasoline excise tax (HUTA) allocated to cities and counties for local street and road maintenance and improvements. Prop. 22 also prohibits the State from taking or redirecting public transportation account revenues dedicated to public transit.

• Protect business development and the economy.  Protecting local government and transportation funds will help preserve the services that businesses rely upon and help protect jobs and the economy.

•  Protect local taxpayers by keeping more of our local tax dollars local where there’s more accountability to voters, and by ensuring once and for all that our gas taxes go to fund road improvements.  Prop. 22 also reduces pressure for local tax and fee increases that become necessary when the State redirects local funds.