1993 AGN MAY 18 I08 - Laserfiche WebLink

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CITY OF COLTON AGENDA REPORT TO: Mayor and City Council FROM: Hani Gabriel, Acting Economic Development Director DATE: May 18, 1993 SUBJECT: Consideration of Resolution No. R-31-93 Protesting Senate Bills 617 and 844 and Directing the --Acting City Manager that any Payment to the Educational Revenue Augmentation Fund Mandated by such Bills be Made Under Protest Background On September 3, 1992, the California State Legislature approved Senate Bills 617 and 844 as urgency statutes, and on September 14, 1992, these bills were approved by the Governor. Together these bills shift $1.3 billion in local property tax revenues from cities, counties, special districts, and redevelopment agencies to a newly created Educational Revenue Augmentation Fund ("ERAF") so thatthe state can meet its constitutionally imposed obligation to fund public education. The net effect of these bills . is not to increase the total amount of revenue allocated to schools, but to reduce the state's contribution by increasing the local contribution. Discussion Under SB 617, counties are directed to take a city's ERAF contribution' out of local property taxes and then distribute the balance. This means that a city never receives its original apportionment of local property tax revenues. On October 20, 1992 the City Council accepted a report from the City Manager communicating that the City of Colton's property tax revenues would be reduced as a result of ERAF by approximately 1.2 percent, for a total of $227,527. SB 844 is different in that it authorizes a county to bill an agency for its share of the ERAF fund. If an agency fails to pay into the ERAF for any reason whatsoever, then the county is authorized to take the money from the city's property tax allocation in the manner set forth in SB 617. The attached resolution of the City Council protests Senate Bills 617 and 844, and directs that any payment made to the ERAF be made under protest thereby preserving the City's right