More state funds ensured for tax base; residents could elect to
form government in November
By Tony Burchyns Staff Writer
Morgan Hill – The state legislature passed a bill Monday that will make it easier for San Martin and other would-be cities to incorporate by ensuring more state funds reach their local coffers.
Before its residents are allowed to vote on whether to form a local government, the community of San Martin is required to show it can raise enough money through local taxes to maintain essential services such as road maintenance and police and fire services.
AB 1602, introduced last year by Assemblyman John Laird, D-Santa Cruz, helps the town meet this goal by letting San Martin apply more state funds toward that tax base. The bill restores statewide funding to unincorporated cities, funding that disappeared after Gov. Arnold Schwarzenegger repealed the tripling of the state’s vehicle license fee immediately after taking office in November 2003.
The news of the landslide vote – 76-0 in the State Assembly as of press time – means San Martin residents may be able to establish their own local government at the polls in November 2007.
“I think it’s wonderful,” said Sylvia Hamilton, president of the San Martin Neighborhood Alliance, which for three years has spearheaded the effort to incorporate the small hamlet of some 8,000 residents sandwiched between Morgan Hill and Gilroy. “With this passing, we have a strong enough tax base to be able to provide the same level of services that are currently provided to residents of San Martin.”
Since Schwarzenegger’s repeal, the state legislature has lowered the vehicle license fee and backfilled the loss to cities and counties with the passage of Proposition 1A in November 2004. The measure allowed schools to hand over property taxes to city governments and then get reimbursed by the state. But so called “new cities,” including San Martin, were left out of the deal.
Laird’s legislation essentially addresses how state funds are allocated to new cities to help get them started.
Unless vetoed by Schwarzenegger, the bill would provide cities in the process of incorporating with about $50 per capita per year from the remaining “city” portion of the state’s vehicle-license-fee funds. It would also ensure that the amount of per-capita funding for all new cities remains the same; the old formula provided higher funding for cities with more registered voters. The bill also ensures a portion of the state’s fuel tax revenue, about $4 per capita, is redirected to new cities. The bill is scheduled to expire in 2009.
“This would give those areas that were in the pipeline when Proposition 1A changed the rules an opportunity to get in under somewhat the same rules as existed before,” Laird said in a written statement.
The bill is sponsored by the California League of Cities, the Local Agency Formation Commission and the City of Salinas, among several other groups. Six cities may now be able to incorporate because of the bill, including Carmel Valley in Monterey County.
Hamilton said the earliest San Martin could hold an election to incorporate is November 2007. Before then, a comprehensive fiscal analysis must be completed and a quarter of the city’s registered voters must sign a petition.
So far, residents have spent as much as $24,000 on feasibility studies on the issue of incorporation, Hamilton said, and it’s likely they will need to spend about $150,000 more to pay for additional consultants and comprehensive fiscal analysis.
Tony Burchyns covers Morgan Hill for Times. Reach him at (408) 779-4106 ext. 201 or tb*******@*************es.com
