Cities want to stop state raids on local taxes

San Mateo Daily Journal

December 28, 2009

By Bill Silverfarb

Local government leaders are ready to face state lawmakers head on in an attempt to stop more raids on local taxes and are ready to collect enough signatures to get a measure on next November’s ballot to prevent the practice.
The signature-gathering effort to qualify the Local Taxpayer, Public Safety and Transportation Protection Act of 2010 started in earnest yesterday. Proposition 1A is supposed to protect cities from tax raids but the state found loopholes in the law to take away gas and redevelopment money as well as property taxes, according to the California League of Cities.
The measure closes loopholes to prevent the state from taking, diverting or borrowing local government, transportation and public transit funds, according to Californians to Protect Local Taxpayers and Vital Services.
The measure needs 694,354 signatures to qualify for the state ballot.
“California’s cities, counties and special districts provide vital police, fire, emergency response and other services that every Californian relies upon,” Chris McKenzie, executive director of the League of California Cities and co-chair of Californians to Protect Local Taxpayers and Vital Services, said in a press release.
Elected officials throughout the Peninsula express strong support for the effort and some are ready to gather signatures themselves to get the measure on the November 2010 ballot.
Belmont Vice Mayor Coralin Feierbach and Councilman Dave Warden both support the campaign.
“I will be collecting signatures also,” Feierbach said. “Unfortunately, the state will find some loophole even if it passes, but we just have to make sure every loophole is closed.”
Warden is also prepared to campaign for the measure.
“The state needs to get its financial house in order and break their addiction of raiding local revenues year after year,” Warden said.
San Carlos Councilman Omar Ahmad is disappointed the effort even has to be made considering the multiple attempts the League of California Cities has already made to stop the raids.
“It is fairly discouraging we have had to do this so many times,” Ahmad said. “The state uses cities as their personal piggy bank and we are getting tired of it.”
The state budget crisis the past couple of years has forced cities to cut services and increase taxes. San Mateo was forced to cut $4 million from its current budget and would have had to cut an additional $4 million if voters did not pass two tax measures last month.
The state borrowed $2.8 million in property taxes from San Mateo this year and $1.2 million from Foster City, for instance.
“The state is killing us. Anything we can do to stop them is a good idea,” San Mateo Mayor John Lee said.
The borrowing, newly-elected Foster City Councilman Charles Bronitsky said, only delays the problem and puts the burden on local governments — forcing them to reduce services and hurting their years of sound fiscal management.
“I am very much in favor of a law that eliminates the state’s ability to raid city coffers. The state Legislature should do what it is obligated to do which is to balance its budget from its own revenue,” Bronitsky said.
Bill Silverfarb can be reached by e-mail: silverfarb@smdailyjournal.com or by phone: (650) 344-5200 ext. 106.
If passed, the Local Taxpayer, Public Safety, and Transportation Act of 2010 would:
• Prohibit the state from borrowing local government property tax funds which are vital for public safety and other local services;
• Prohibit the state from borrowing or taking gasoline taxes which are dedicated to transportation and transit improvements and services, including the state sales tax on gasoline (Prop. 42 funds), and the Highway User Tax on gasoline (HUTA);
• Prevent the taking of locally levied taxes, including parcel taxes, sales taxes and other locally imposed taxes that are currently dedicated to cities, counties and special districts;
• Prohibit the state from taking, borrowing or redirecting existing funding for public transit, including existing taxes on gas and “spillover” funds dedicated to the Public Transportation Account;
• Add additional constitutional protections to prevent the state from raiding redevelopment funds or shifting redevelopment funds to other state purposes.
Source: Californians to Protect Local Taxpayers and Vital Services