HomeMy WebLinkAbout2009/05/12 Item 15
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RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA FINDING A SEVERE FISCAL HARDSHIP
WILL EXIST IF ADDlTIONAL LOCAL PROPERTY TAX AND
IN-LIEU TAX FUNDS ARE SEIZED AND ADDITIONAL
UNFUNDED MANDATES ARE ADOPTED BY THE STATE
OF CALIFORNIA
WHEREAS, the current economic crisis has placed CltlCS undcr incredible financial
pressure and caused city officials to rcopen 'already adopted budgets to make painfiJ! cuts,
including layotl's and furloughs of city workers, decreasing maintenance and operations of public
facilities, and reductions in direct services to keep spcnding in linc with declining revenues; and
WHEREAS, since the early 1990s the state government of California has seized over
$8.6 billion of city property tax and in-lieu tax revenues statewide to fund the state budgct evcn
aileI' deducting public safety program repayments to cities by the state; and
WHEREAS, in FY 2007-08 alone the state seized $895 million in city property taxes and
in-lieu taxes statewide to fillld the state budget after deducting public safety program payments
and an additional $350 million in local redevelopment funds were seized in FY 2008-09; and
WHEREAS, the most signilicant impact of taking local property taxes and in-lieu taxes
has bcen on the quality of public safety serviecs cities can provide since public safety comprises
the largest part of any city's general fund budget; and
WHEREAS, the taking of local property taxes and in-lieu taxes by the state has also
impacted the City's ability to provide recreation, library, public works maintenance, and other
public services; and
WHEREAS, in 2004 the voters by an 84% vote margin adopted substantial constitutional
protections for local revenues, but the legislature can still "borrow" local property taxes and in-
lieu taxes to fund the state budget; and
WHEREAS, on May 4 the California Department of Finance announced it had proposed
to the Governor that the state "borrow" over $2 billion in local property taxes and in-lieu taxes
from cities, counties and special districts to balance the state budget, causing deeper cuts in local
public safety and other vital services; and
WHEREAS, the impact of the state's "borrowing" on the City of Chula Vista would be
approximately $4.3 million; and
WHEREAS, in the past the Governor has called such "borrowing" proposals tiscally
irresponsible because the state will IInd it virtually impossible to repay and it would only deepen
the state's structural defie;t, preventing the state ti"OI11 balancing its budget; and
Resolution No. 2009-
Page 2
WHEREAS, the Legislature is currently considering hundreds of bills, many of which
would impose new costs on local governments that can neither be afforded nor sustained in this
economic climate; and
WHEREAS, state agencies are imposing, or considering, many regulations imposing
unhll1ded mandates on local governments without regard to how local agencies will be able to
comply with these mandates while meeting their other responsibilities; and
WHEREAS, the combined ct1ccts of the seizure of the City's property taxes and in-lieu
taxes, increasing unfunded state mandates, and the revenue losses due to the economic downturn
have placed the City's budget under serious fiscal pressure; and
WHEREAS, our city simply cannot sustain the loss of any more property tax or in-lieu
tax lunds or be saddled with any more state mandates as they will only deepen the linaneial
challenge facing our city; and
WHEREAS, a number of the City's financial commitments arise 1\'0111 contracts,
including long term capital leases and debt obligations which support securities in the public
capital markets, that the City must honor in full unless modiJied by mutual agreement of the
parties.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula
Vista does bereby adopt a resolution finding tbat a severe liscal bardsbip will exist if tbc
recommendation of the California Department of Finance to "borrow" $2 hillion of local
property taxes and in-lieu taxes is implemented by tbe Government and tbe Legislature; and
RESOL VED FURTHER, that tbe City Council strongly and unconditionally opposes tbe
May 5 proposal of tbe California Department of Finance and any otber state government
proposals to borrow or seize any additional local funds, including property tax, redevclopment
tax increment, in-lieu property taxes, and the city's share of the Proposition 42 transportation
sales tax; and
RESOL VEl) FURTHER, tbat tbe City Council strongly urges the state legislature and
Governor to suspend tbe enactment of any new mandates on local governments until sueb time
as tbe economy has recovered and urges tbe state to provide complete lunding for all existing
and any new mandates; and
RESOL VEl) FURTHER, tbat tbe City Clerk sball send copies of this resolution
to tbe Governor, our state scnator(s), our state assembly member(s), and the League of California
Cities.
Presented by
Approved as to form by