GILROY
– California cities are trying to end a decade-long trend in
Sacramento of robbing local coffers to fill the massive gap between
revenue and spending within the state budget.
GILROY – California cities are trying to end a decade-long trend in Sacramento of robbing local coffers to fill the massive gap between revenue and spending within the state budget.
As early as November 2004, the League of California Cities could place an initiative on the ballot that would require a two-thirds vote of the state legislature and majority approval of the electorate before local tax revenue is redirected to the state. The new law would make it significantly harder to funnel city money to Sacramento, a system that is costing Gilroy nearly $2 million in revenue per year, City Administrator Jay Baksa said.
“The cities have finally said, ‘Enough is enough,’ ” Baksa said. “The local democracies are going to ask the voter to do something we couldn’t accomplish through our inept legislators (at the state).”
The proposed initiative is in its infancy stage. The League of California Cities is looking for support from cities like Gilroy before moving ahead with a petition-signing campaign necessary to land the initiative on a ballot.
It figures to find favor in Gilroy. Just this summer, Gilroy lost roughly $250,000, Baksa said, when vehicle licensing fees earmarked for Gilroy were collected by the state but never returned. Another $250,000 loss was endured when the state decided to slice in half the amount of sales tax revenue that stays local, Baksa said.
City Council will discuss the initiative at an upcoming retreat. At a following City Council meeting, the dais could approve a resolution stating reasons it would support the drafting of a ballot initiative. Once approved for the ballot, the League will then seek endorsements from cities.
“I’m hoping for unanimous support from the Council, but I’ll take what I can get,” said Councilman Craig Gartman, Gilroy’s voting delegate to the League of California Cities.
Taking city revenue to cover state costs is nothing new. Since Proposition 13 reduced tax revenue more than 20 years ago, the practice has been used, Baksa said.
In the early 90s, an economic slowdown rekindled the practice. Gilroy lost around $1 million at that time when the state began charging cities for booking prisoners at county jail and started siphoning off a percentage of the revenue from city fines to pay for the state court system.
When the state discovered its $38 billion gap between revenue and spending this year, using city money was a partial solution to balancing state books this time around, too.
