1998 AGN JUN 02 I26 - Laserfiche WebLink

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CITY OF COLTON AGENDA REPORT For Council Meeting of June 2, 1998 TO: Honorable Mayor and Councilmembers FROM: City Attorney SUBJECT: Resolution to oppose legislation to repeal the California State Vehicle License Fee DATE: June 2, 1998 Background: Four bills have been introduced in the California State Legislature which propose to repeal the Vehicle License Fee tax, a major source of revenue for local government. Existing California State law requires that a specified percentage of the. money collected from the Vehicle License Fee ("VLF") be deposited in the Vehicle License Fee Account of the Local Revenue Fund and allocates this money to local agencies for various human services programs. If the proceeds from this tax, which average approximately $185 per car, are eliminated, it is likely that local government services (such as public safety, roads and highways) will be jeopardized. The four bills are (copies attached): Assembly Bill 1776 (McClintock), Senate Bill 1723 (Haynes), Senate Bill 1998 (Hurtt), and Senate Bill 2001 (Hurtt). Two of the bills (AB 1776 and SB 1723) seek to repeal the. VLF and transfer sales and use tax revenues from the State Retail Sales Tax Fund over a five-year period. The other two bills (SB 1998 and SB 2001) seek to repeal the VLF altogether. All four bills are silent on replacement revenues for newly incorporated cities. Discussion: SB 2001 and SB 1998 would repeal the VLF immediately. This would cost cities approximately $1 billion per year in discretionary funding. The League of California Cities estimates that the potential loss is $37 to $40 per capita. AB 1776 and SB 1723 would swap the VLF, a constitutionally protected revenue source, for state sales tax revenues which could be easily shifted from local agencies at any time. Furthermore, AB 1776 and SB 1723 would make local agencies more dependent on sales, tax revenues which lessens protection during economic downturns. The impact of this proposed legislation on public safety programs of California cities cannot be measured. Therefore, the League of California Cities is strongly opposed to the proposed legislation which, if adopted, will either eliminate or phase out/reduce the Vehicle License Fee. Recommendation: Join in support of the League of California Cities to oppose Assembly Bill 1776 and Senate Bills 1723, 1998 and 2001, and approve the attached Resolution. RVPUBUCSD14"58 T+ 26