06-01-1999 CC RPT 16A - Laserfiche WebLink

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DATE: 6-1-99 ~,~7.,;- .....".:~i~;:.-;:C: ...~?' - ITEM NO.: 16a HAY 2 4 9- 999 May21,1999 CI~ MANAGERS RECENT STATE BUDGET DEVELOPMENTS t/lYE RINSE '1'0' CAlYI'IOUS OPTIMISM; THE GOVERNOR IS THE KEY!; SENATE DEMOCRATS PROPOSE PROPERTY TAX GROWTH CAP AND ASSEMBLY DEMOCRATS OFFER INFRASTRUCTURE SPENDING In a major step forward for local government fiscal relief, Senator Steve Peace, Chair of the Senate Budget Committee, moved to cap the growth on the property tax shift. It is his intent that this be permanent and ongoing with the mount of shift frozen at the current dollar level and any growth be retained by the local entities. The approximate value of capping property tax shifts is $234 million of permanent and growing revenue!!! More good news came from Assembly Budget Subcommittee Chair George Nakano and Assembly Member George Runner, who spearheaded the effort to procure $200 million in local relief as part of the Assembly version of the Budget. The allocation would' have to be spent on libraries, parks, and local infrastructure needs. However, there would be flexibility for local agencies to spend this money on other critical local needs. In addition to the $200 million, a significant component aimed specifically at local streets and roads is included. In other action of local budgetary interest, the COPS program was funded at its current level of $100 million per year with none of the statutory changes the Governor was seeking to the program. In January the Govemor called for a refocusing of this program with the money to be spent on personnel rather than equipment. The Assembly budget did, however, include the Govemor's call for a new $61 million dollar program to fund one time purchases of law enforcement related equipment. Law enforcement agencies would be given $40 million dollars on a per capita basis, with no agency receiving less than $25,000. The remaining $21 million would be disbursed through the Office of Criminal Justice Planning (OCJP) on a competitive grant basis. The Assembly funded the Infrastructure Bank at $225 million, $200 million short of what the Governor requested. Local flood control subventions were funded at their full mount of $44 million by both houses. ACTION MESSAGE.' Support inclusion of local fiscal relief as pan of this year's budgeL Cities should focus their attention on a number of areas. First, the Governor. As we have seen in the past, the Governor is extremely powerful in the budget process. He'll need to be convinced that giving local government money is a winning strategy for him and California's future economic health. City officials must mobilize a broader coalition of interest groups to focus on lobbying the Governor to support local relief. Unions, realtors, the Chambers and business community, particularly Silicon Valley League of California Cities