1997 AGN FEB 18 I17 - Laserfiche WebLink

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S/ ,-, 'oc c - Et IV. �'C O G 01!04. E C FAX TRANSMISSION ONLY. PAGES SENT: 4 t c fy F cotJOT4 C.I Ayo is CFPICE z IT'S OF C0 1NA, 125 east College Street * Covina, California X31723-�1- 9 �IPo FEBRUARY 5, 1997 S TO: MAYORS, CITY COUNCIL MEMBERS, AND CITY MANAGERS ,i FROM: Z6 -- � NDA DEE SAR ER, MAYOR OF COVINA SUBJECT: SALES TAX UPDATE On January 23, 1997 the City of Covina submitted bill language to Legislative Counsel through a local representative's office to have a "Sales Tax Shift" bill developed in accordance with the Legislative Intent language as attached. While California Contract Cities Association and Independent Cities Association have voted to support the sales tax kill concept, the League has yet to do so. Covina has, however, been appointed to a League Task Force to look at various revenue options. Thank I all of you who made a request to the League President that Covina be appointed to this Task Force. The above two actions set the stage for what now needs to be done. First, we need to get a bill author named prior to February 28, 1997. Our preference is a moderate democrat that can work with the new Legislature. More than one source has recommended Senator Betty 7 karnette (D-27) from the Long Beach area. If you would like to call your legislator and determine if there is interest, please let us know by calling me at (818) 858-7213. Secondly, it is critical that we have the League take early and decisive action to support this J bill. -The Task Force that has been appointed will be vital to this encs. While there are other options which will be discussed at the -meeting in Los Angeles on February 11, 1997, I believe that the most beneficial option to cities is the Covina sales tax proposal. The Covina proposal. will produce about $2.2 million annually to cities after 5 years; about 590 per person per year. By comparison, the ERAF bill introduced by Assemblyman Aguiar, A.B. 1, would equate to about $57 million the first year (in 1995-96 dollars) and an additional 57 million each year until 5571 million in annual operating revenue is replaced. For Covina, a city with a population o.f,..4S,000, the property tax proposal would equate to about 5100,000 in added revenue in the first year while the sales tax proposal would be about $810,000. We believe the sales tax bill will: (1) replace all the losses due to state takeaways artd.make up for the way Proposition 172 revenues are distributed; (2) reduce competition amongst cities for retailers; (3) provide an incentive for housing development that is 8 times stronger than the property tax bill; and (4) create a more equitable and flexible public finance system.