8F Consent 2009 0601 - Laserfiche WebLink

Home

1400 K Street, Suite 400 • Sacramento, California 95814 -~ Phone: 916.658.$200 Fax: 916.658.8240 <~k= CrlLl ~=~~}i~ hJl~, www.cacities.org TO: City Officials FROM: Chris McKenzie, Executive Director RE: Sample Resolution Declaring Severe Fiscal Hardship DATE: Friday, May 08, 2009 Background. On May 5 the Department of Finance announced it had proposed to the Governor that the state "borrow" over $2 billion in local property taxes from cities, counties and special districts to balance the state budget, causing deeper cuts in local public safety and other vital service. In order to start that process, the Governor would have to issue a proclamation declaring the existence of a "severe fiscal hardship." The legislature would then have to implement the "borrowing" program by passing urgency legislation (2/3 vote) which identifies how the "loan" will be repaid with interest. Resolution. The League has developed the attached Resolution Finding A Severe Fiscal Hardship Will Exist if this proposed state property tax raid is added to the pressures of the ongoing property tax losses and the serious revenue losses due to the economic recession. The resolution in effect states that the idea of the state taking property tax funds from already stressed city budgets is ludicrous and irresponsible. It helps demonstrate that part of the reason cities are cutting there budgets today, in fact, is because of past and continuing property tax raids. If possible, we urge that a staff report be prepared with information on property tax losses (see below) and budget cuts the city has made and is facing. Cumulative Property Tax Losses. The attached resolution cites the cumulative property tax losses of cities statewide since the state began taking these funds in the early 1990s- which is $8.6 billion statewide even after deducting payments cities receive from the Prop. 172 public safety sales tax the state COPS grant program. If you want to see your individual city total, see: http://www.californiacityfinance.com/ERAFbyCity08.pdf. Please use the figure in the last column on the right if you want to insert the amount your city has lost to these state raids. Where to Send Copies. The draft resolution directs the city clerk to send copies to your legislators, the Governor, and the League. We would appreciate you faxing copies to both your League Regional Public Affairs Manager and the League's Sacramento Office (Fax 916-658-8240). Note. The last WHEREAS clause was included on the advice of bond counsel to avoid any implication that the city would not honor any of its bond or other contractual obligations. Questions. If you have any questions or need any information please contact your League Regional Public Affairs Manager.