GILROY
– With or without his fellow Council members’ blessing, Russ
Valiquette says he will pursue new legal solutions to the perpetual
tax wrangling between cities and the state.
GILROY – With or without his fellow Council members’ blessing, Russ Valiquette says he will pursue new legal solutions to the perpetual tax wrangling between cities and the state.
Valiquette says he will lobby council members from around the state during a League of California Cities convention in Sacramento next month. The first-term Gilroy City Councilman wants to use the courts to change the way tax revenue is collected and distributed in California.
Specifically, Valiquette wants Gilroy to file a lawsuit against the state citing the way it collects and distributes city-generated tax revenue is unconstitutional. If a court agrees with him, it could open the door for Gilroy to collect its own taxes and distribute what it owes to the state, severely limiting the legislature’s ability to shuffle funds at the expense of the city.
Since the early 1990s, Gilroy has lost $16 million in revenue to Sacramento, city staff claimed. The revenue shifting was done to bail the state out of its budget shortfalls.
“We’re always just doing the reactive thing all the time. We complain about the state taking money from us, but then we wait for other cities to do something about it,” Valiquette said. “I believe we need to act for ourselves and let other cities join the cause, instead of us jumping on their coat tails.”
Valiquette wanted the rest of City Council to push for the lawsuit, too. Although there’s been no opposition, there also has been little support.
Valiquette’s hope of Council directing staff to file a lawsuit fell by the way side Monday night, after research by the city attorney on precedent-setting case law proved fruitless. Council chose to direct staff to continue monitoring existing suits against the state over local revenue takeaways. It also expressed support for a November ballot initiative banning further revenue shuffling by the legislature without voter approval.
“I’m sure the citizens who fought for Prop. 13 heard the same thing, that it couldn’t be done,” Valiquette said. “But it just takes people getting ticked off enough to make things change. That’s what a lawsuit does. It sends up a red flag to somebody that says, ‘We’re ticked off.’ ”
Some Council members and staff have expressed concerns that a lawsuit filed by Gilroy against the state would put this little city in a costly and drawn-out legal melee with Sacramento. Ironically, in these tight budget times, it may be too expensive to fight for revenue.
Valiquette said the battle will not be as costly as some may fear.
“If we kind of kicked this idea around a little bit I believe a lot of cities might want to jump in (and divvy up any legal costs),” Valiquette said. “I don’t think Gilroy will necessarily be spending thousands of dollars arguing this in court.”
