March 18, 2004
| TO: | CLA Members/ Systems/ Network Contacts |
| FROM: | Mike Dillon, Lobbyist Christina Dillon, Lobbyist |
| RE: | SPECIAL "LOCAL GOVERNMENT WORKING GROUP" MEETING |
We have been invited to participate in a special working group on local government finance and reform, that has been initiated by Senator Tom Torlakson, the Chair of the Senate Local Government Committee. There is strong interest by several of the Senators on the Committee, and select legislators to find a legislative solution to the two competing local government ballot measures -- the LOCAL Initiative and the so-called "Hertzberg Initiative." In addition, the Governor's proposal, and subsequent LAO proposal, regarding ERAF, is on the table as well. Senators involved in the working group to date have been Senator Torlakson, Senator Dick Ackerman, Senator Ross Johnson, Senator Denise Ducheny, and Senator Bruce McPherson. A few parties met briefly last week, and a larger group was invited to join the discussions Tuesday night.
Present at Tuesday's meeting were representatives from CSAC, the League of Cities, special districts, water agencies, builders, the Governor's office, Senate Revenue and Taxation Committee staff, Assembly Speaker's staff, and lobbyists representing "no and low" property tax cities. Senator Torlakson, Senator Johnson, and Senator Ducheny chaired the meeting.
Senator Johnson told the group that he was "very serious" about the effort to address local government reforms, including the problem of unfunded local mandates, and wanted to find a way to identify "adequate, predictable [funding] sources for local government." He added the caveat that "the important part is a guarantee so that the rug isn't pulled out from underneath [local government annually]." Senator Torlakson then announced that he and Senator Johnson will co-author two bills -- a legislative equivalent of the LOCAL initiative and a legislative equivalent of the "Hertzberg Initiative." These two bills would then be amended to reflect findings and suggestions of the working group. In terms of mechanics, Senator Torlakson said he hoped to have two or three more working group sessions and then begin holding hearings on the measures.
The major themes at the meeting were: 1) the ongoing debate of swapping the property tax for the sales tax, with arguments pro and con on each side, 2) allowing a lower threshold for the passage of special local taxes for cities, counties, and special districts, 3) the stability of the VLF and allowing the dollars to be kept locally, 4) revisit the local income tax, modeled after Ohio, with the belief that it will alter behavior, drive jobs, and offer better, higher paying jobs in local communities, 5) local governments should not have to pay sales tax on local services, and 6) local property tax override by a two-thirds vote.
The working group has identified areas that are considered "Local Level Prime Responsibilities," or those services that should be a local responsibility rather than a state dictated, state funded responsibility. They are: police, fire, infrastructure, public works, libraries, local parks and recreation, land use decision-making, and a few pertaining to public health services.
Those present were told by Senator Johnson that the status quo and "protecting ones turf" will not be acceptable approaches in the working group coalition, and that the participants should be prepared to think outside the box and consider all options. Next week, the working group is expected to discuss special districts and re-development agencies. We will keep you informed as the discussions continue in the working group.