HomeMy WebLinkAboutResolution No. 03-C004 RESOLUTION NO. 03-C4
A RESOLUTION URGING THE CALIFORNIA LEGISLATURE TO REJECT THE
GOVERNOR'S PROPOSED SHIFT OF LOCAL VLF REVENUES AND TO HONOR THE
1998 COMMITMENT TO RESTORE THE VLF
WHEREAS, prior to 1935, cities and counties collected property taxes on motor
vehicles to fund essential local public health and safety services; and
WHEREAS, in 1935, the Legislature first enacted the Vehicle License Fee (VLF)
Act, replacing the property tax on vehicles with a 1 .75 percent fee charged against the
value of the motor vehicle; and
WHEREAS, in 1948, the rate of the VLF was increased to 2 percent of the value
of the vehicle; and
WHEREAS, in 1986, the voters voted overwhelmingly to constitutionally
dedicate the proceeds of the VLF to fund city and county services; and
WHEREAS, 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 67.5 percent offset against the amount owed. The amount paid to local
governments in lieu of the reduced VLF payment is known as the "VLF backfill"; and
WHEREAS, 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; and
WHEREAS, during the previous budget crisis ten years ago, the State's ERAF
shift began depriving Azusa of its former share of local property tax, a reduction in
revenue to nearly $ 1 million every year; and
WHEREAS, in light of that revenue loss, revenues derived from the VLF and
backfill are of critical importance in funding vital local services, and
WHEREAS, the Governor's proposed elimination of the backfill would result in
Azusa suffering a devastating annual reduction of $932,000 during this fiscal year and
$2,004,000 beginning in July, which would mean an immediate 10% cut in the General
Fund budget; and
WHEREAS, nearly half of Azusa's General Fund budget goes to Fire and Police
services, this magnitude of cuts would either require across-the-board service
reductions and lay-offs or an even deeper immediate 20% cut to non-safety
departments; and
WHEREAS, any failure by the Legislature to maintain the VLF backfill or restore
the VLF will cause widespread disruption not only in Azusa but in local government
services essential to the well-being of California citizens and their cities and counties;
and
WHEREAS, Governor Davis' 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; and
WHEREAS, 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.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OFAZUSA, CALIFORNIA,
that if the state General Fund can no longer afford the expense of part or all of the VLF
"backfill" that the Legislature and Governor of California are hereby respectfully urged
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; and supports the call by the Speaker of the Assembly to take
this action; and
RESOLVED FURTHER, that the City of Azusa hereby expresses its profound
appreciation to the Speaker of the Assembly and all legislators who support such VLF
restoration legislation.
APPRO D o this 21" day of January, 2003.
Cristina Cruz-Madrid, Mayor
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the City
Council of the City of Azusa, at a regular meeting thereof, held on the 215' day of
January, 2003, by the following vote of the Council:
AYES: COUNCILMEMBERS: HARDISON, STANFORD, CHAGNON, ROCHA,
MADRID
NOES: COUNCILMEMBERS: NONE
ABSENT: COUNCILMEMBERS: NONE
Vera Mendoza, City Clerk /