HomeMy WebLinkAbout2003-020 - Reject the Governor's Proposed Shift of Local Vechicle License FeeRESOLUTION NO. 2003-020
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA URGING THE CALIFORNIA LEGISLATURE
TO REJECT THE GOVERNOR'S PROPOSED SHIFT OF
LOCAL VEHICLE LICENSE FEE ("VLF") REVENUES AND
TO HONOR THE STATE'S 1998 COMMITMENT TO
RESTORE THE VLF
bk:2/4/03
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS
FOLLOWS:
Section 1. The City Council of the City of Santa Ana hereby finds, determines
and declares as follows:
Prior to 1935, cities and counties collected property taxes on motor
vehicles to fund essential local public health and safety services.
In 1935, the Legislature first enacted the Vehicle License Fee ("VLF") Act,
replacing the property tax on vehicles with a one and ~ percent (1.75%)
fee charged against the value of the motor vehicle.
In 1948, the rate of the VLF was increased to two percent (2%) of the
value of the vehicle.
In 1986, the voters voted overwhelmingly to constitutionally dedicate the
proceeds of the VLF to fund city and county services.
In 1998, a period of strong economic growth, the Legislature approved the
use of a portion of the rapidly growing state General Fund to reduce the
VLF payments of vehicle owners. This amount, known as the "offset",
grew in future years to a sixty-seven and ¼ percent (67.5%) offset against
the amount owed. The amount paid to local governments in lieu of the
reduced VLF payment is known as the "VLF backfill."
The 1998 legislation and subsequent enactments contain clear provisions
that when insufficient funds are available to be transferred from the
General Fund to fully fund the offsets and backfill amount that the VLF
offset shall be reduced and VLF payments increased.
VLF and backfill revenues constitute fifteen to twenty-five percent (15-
25%) of typical city and county general purpose revenues. On average,
more than sixty percent (60%) of city general fund spending and more
than half of county general funds go to front line law enforcement, fire,
emergency medical services, and health care programs.
Resolution No. 2003-020
Page 1 of 3
VLF backfill revenue constitutes seven and six-tenths pement (7.6%) of
Santa Ana's general purpose revenue. More than sixty-five pement (65%)
of the City's general fund spending goes to front line law enforcement, fire,
and emergency medical services
Revenues derived from the VLF and backfill are of critical importance in
funding vital local public health and safety services.
Any failure by the Legislature to maintain the VLF backfill or restore the
VLF will cause widespread disruption in local government services
essential to the well-being of California citizens and their cities and
counties.
Governor Davis's proposal to divert $4 billion in local VLF backfill
payments over the next 17 months fails to honor the 1998 commitment
and is a direct assault on local services that will be felt by every California
resident.
Shifting $4.2 billion in locally controlled revenues for local services is
neither equitable nor fair. No state program or department has been
asked to shoulder such a disproportionate share of the budget pain.
These cuts come on top of the nearly $5 billion each year that is
transferred from local services to fund state obligations.
Section 2. If the State General Fund can no longer afford the expense of part
or all of the "VLF backfill," the City of Santa Aha hereby respectfully urges the
Legislature and Governor to implement the provisions of current law providing for the
reduction of the VLF offset in bad economic times and to restore the VLF in an amount
necessary to reduce the VLF backfill.
Section 3. The City of Santa Ana hereby expresses its profound appreciation to
the legislators who support such VLF restoration legislation.
ADOPTED this 18th day of February, 2003.
Resolution No. 2003-020
Page 2 of 3
APPROVED AS TO FORM:
Joseph W. Fletcher, City Attorney
AYES:
NOES:
ABSTAIN:
NOT PRESENT:
Councilmembers:
Councilmembers:
Councilmembers:
Councilmembers:
Bist, Garcia, Pulido, Solorio (4)
Christy, Franklin (2)
None (0)
Alvarez (1)
CERTIFICATION OF ATTESTATION AND ORIGINALITY
Date: ?-/,//~/,~'~ >:~
I, PATRICIA E. HEALY, Clerk of Council, do hereby attest to and certify the attached
Resolution No. 2003-020 to be the original resolution adopted by the City Council of the
City of Santa Ana on February 18, 2003.?.~,·~Clerk~' "~'~ ~' ' of- ~"'~'CouncilJ/;~"~:-~--'¢'~'~~- ~'~ -
City of Santa Ana
Resolution No. 2003-020
Page 3 of 3