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HomeMy WebLinkAboutMINUTES - 12182001 - C.110 • I ! ��^� ' �'' CONTRA TO: BOARD OF SUPERVISORS '' �'`:` COSTA FROM: Gayle B. Uilkema Supervisor �' arr•; COUNTY District II DATE: December 18, 2001 SUBJECT: CSAC Board of Directors' Action SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION RECOMMENDATION(S): ACCEPT the report from the Chair, Board of Supervisors, on actions by the Board of Directors of the California State Association of Counties on proposed ballot measures which would affect county revenues and mandates. BACKGROUND/REASON(S) FOR RECOMMENDATION(S): For over a year, the California State Association of Counties (CSAC) has been working with the League of Cities to develop a ballot measure for the November 2002 ballot that would protect local government revenues. On October 30, 2001, CSAC submitted two versions of the ballot measure to the Attorney General for title and summary. Versions differed in their provisions for legislative suspension of the requirement for state reimbursement of newly mandated services. Numerous concerns had been expressed about the proposed ballot measure including the ability of the counties to raise sufficient funds for a campaign and the need for support from law enforcement and employee organizations. CONTINUED ON ATTACHMENT: YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR R CO MEN ION OF B ARD MMITTEE _APPROVE _OTHER SIGNATURE(S): ACTION OF BOARD ON December 18, 2001 APPROVED AS RECOMMENDED OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A X UNANIMOUS(ABSENT None 1 TRUE AND CORRECT COPY OF AN AYES: NOES: ACTION TAKEN AND ENTERED ABSENT: ABSTAIN: ON MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE SHOWN. Contact: Sara Hoffman,335-1090 ATTESTED JOHN SWEETE ,CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR cc: CAO Dept Heade BY �,eazDEPUTY •. �f is �� .4:"'�. � � .. I � i`:G:r 1 1 ,. r .r i��. ` M A ... ... 4• .. ...._. f. ... r,... _. �v. ' ;F ... .. .. . . :,. .. -...t.. �' ..... .. .. '�.. is .. t .. J BACKGROUND/REASON(S) FOR RECOMMENDATION (cont'd): The constitutional amendment ballot measure became even less viable with the recent development of a ballot measure sponsored by a coalition of law enforcement and hospitals. This ballot measure would raise a quarter cent sales tax for antiterrorism and public protection and would shield local public safety expenditures from a state reduction of their revenues. CSAC staff began participating in negotiations and drafting of this alternate ballot measure in early November. Key elements of the draft as of November 28th included: • allocation of the quarter cent sales tax: - 3% California Highway Patrol - 3% California Department of Forestry - 6% Public Health - 20% Trauma Centers - Emergency Rooms - 28% Fire - 20% Sheriff - 20% Police ■ MOE and non-supplantation language - Funds from the quarter cent may not supplant existing funding - Maintenance of effort with a base year of 2000-2001 ■ Anti-terrorism plan necessary to qualify for funds ■ Local governments would have to identify funding for public safety state-mandated services and the source of revenue for such services. Those funds would then be protected from reductions by the state. ■ Restoration of funds would be assured for any cuts made by the legislature during the 2002-2003 budget year. At the recommendation of the Ballot Measure Steering Committee, the CSAC Board of Directors took the following action on November 28, 2001: Place the existing ballot measure on hold and support, with a commitment of up to $1 million in nonpublic funds, a new proposal containing a quarter cent sales tax increase for law enforcement, fire, trauma centers/ ERs and public health as well as protection of significant majority of local revenues provided that changes are made to eliminate the maintenance-of-effort requirement and to increase funding to public hospital systems. A final "go-no go" decision as well as expenditure of funds would be directed by the Steering Committee. The Steering Committee is expected to review progress on the results of negotiations on the MOE and hospital pieces prior to the Board's December 18th meeting. A final draft of the ballot measure may be available then as well. Further information will be sent to Board members as soon as it becomes available. Attached please find the November 28th report from CSAC staff to the Board of Directors on the ballot measure as well as the draft ballot measure as of that date. 1 .. �i __,�•: ..i. � .,, .... .. .,. .. is ... .� r ..... ��� i-. :i�:''. .. .. .. .. _. 'i��i'..I.. :J' .. ... I .. � + ' , `. IL's t - � �i' � .. ::•.,. ,. a . ,. •.. .. 'J:.. a ) i,i .. is .. ... .. , _ .I.r .JS �.>'::' � .t'.. ,—�?Y:. •' .;��_; .:.l .✓.. 1.. � ,..I ..:�e. .. . �,i'. .. ,:iii. . . :il'•_ .. . .•i' .r.. ... .. . ,.. .. ;i' .., .., _ • . ,.tip � .;�'t + .� �i•� �3r. ' •. ti.'�e I�lf. '✓F�.. ..'i. }1 Ilf..i � � � � .. .'%'.�. •.. I'., � .a. . ... +i r{. _ ,�l�•••i•..♦ -.. .. .. .. f'. yaw:. ... .... ��'•.. � .�.. � I .. � i .. ... ... .,.•'i ..'�.: .. DRi; _. .�.... .. ,+ .:%.:. CALIFORNIA STATE ASSOCIATION OF COUNTIES 1100 K Street, Suite 101 Sacramento, CA 95814 (916) 327-7500 FAX 441-5507 Date: November 28, 2001 To: CSAC Board of Directors From: Steven C. Szalay, Executive Director RE: Consideration of"Option 3" Proposal: To place the existing CSAC ballot measure on hold, and support, with a commitment of up to $1 million in non-public funds, a new proposal containing a quarter cent sales tax increase for Law Enforcement, Fire, Trauma Centers/ER's and Public Health, as well as protection of a significant majority of local revenues. Expenditure of funds would be directed by the Steering Committee. Background Since November of last year, CSAC has been working with the League of Cities to develop a ballot measure for placement on the November 2002 ballot that would protect local government revenues. These efforts resulted on October 301h in the submission to the Attorney General for Title and Summary. "Option 1" and Option 2" contain provisions that are based on the existing framework within the Constitution that requires the state to reimburse local governments for mandated services. The distinction between the two options lies in the ability to suspend its provisions. Under Option 1, the legislature, by a two-thirds vote may suspend for up to two years in any ten-year period. Under Option 2, the Legislature may (again with a two-thirds vote) suspend for only one year, which may then be extended for an additional two years by a vote of the people of California. While these options have been extensively researched and painstakingly drafted, our political consultants have consistently indicated that they would succeed only with the strong support of police and fire and the lack of strong, funded opposition. The other essential element for success. is raising $6 to $8 million for the campaign. New developments Over the last two weeks, CSAC has been participating in negotiations and drafting to craft a potential alternative ballot measure to appear on the November 2002 ballot which would raise a '/4 cent sales tax for anti-terrorism and public protection and would protect local public safety expenditures from state plunder. The '/ cent would be distributed to fire, sheriff, police, trauma centers/ER's, public health, CHP and CDF. In order to receive the '/ cent sales tax revenue, local governments would have to meet an MOE requirement with a base year of 2000-2001, and not supplant existing spending with the new revenues. The language is based on the MOE requirements of Proposition 172 which requires, that if the MOE is not met, new revenues are reduced proportionately. The protection of public safety and state-mandated expenditures requires that the state not reduce any subvention or source of local revenue below the amount required to fund public safety and state mandates. While several counties are running projections based on actual data, preliminary estimates indicate that this could protect as much as 75 to 80% of a county's general fund. At a meeting held last week, representatives from sheriffs, police, fire, hospitals, special districts, cities.and counties were present to discuss the draft language. A rough draft of the measure, which was drafted by Nielsen, Merksamer with the help of CSAC, the League and Special Districts, was presented and discussed, and there was (after considerable discussion) general consensus that the language was acceptable and, although there remained significant issues to resolve, that it represented the basis of agreement. A major exception to this consensus is the issue of the distribution for the trauma/ER percentage of the '/ cent sales tax, as we have not had time to review or discuss this constituency's approach. A poll has been conducted that indicates that this new approach has sufficient support to pass, tax increase and all. The cross tab data also indicate that the base of support for this measure is solid. Action Items: The Steering Committee met on Monday, November 27th, to consider the following actions: (1) The fate of our existing measure. We filed two measures (Option 1 and Option 2) on October 30th with the Attorney General for Title and Summary. These will be completed during the month of December. Signature gathering can begin after title and summary are complete. It has been the opinion of each of our political consultants that our measure will fail if put head to head with a '/4 cent tax increase for police and fire. They have also repeatedly indicated that strong police and fire support would be essential to the passage of our measure. The Steering Committee recommended: That the existing options be placed on hold. (2) Is this compromise worth it? "Option 3" provides new revenue to county public health, trauma and ER systems and to the sheriff. It also provides protection of a significant proportion of county general funds. Unlike our measure, however, it does not protect all revenues or programs, thereby protecting some and potentially creating a greater vulnerability for others. The Steering Committee recommended: Support Option 3. (3) How much are we willing to commit? The CSAC Finance Corporation approved (contingent upon Board of Directors actions) the expenditure of up to $1.2 million in non-public funds on a ballot measure. During the discussion of our ballot measure, we discussed the need to raise $6 to $8 million in total for the campaign. Although it is unknown at this time whether the new option would generate opposition and increase the costs of the campaign, sponsors will have significant resources other than our own. Our position in the campaign is contingent on the ability to commit funds to this effort. Staff recommendation: Approve up to $1 million for expenditure as directed by the steering committee in support of Option 3. A draft of the language is attached. The measure contains the following major elements (1) Title: The Anti-Terrorism and Public Protection Act of 2002 (2) Preamble — Intent and introductory language. Although this has no force and effect of law, it is useful to set the stage for voters to explain why the measure is necessary. (3) Imposition and allocation of the '/< cent tax. The working percentage .distribution is as follows: 3% CHP 3% CDF 6% Public Health 20 % Trauma Centers/ER's 28% Fire 20% Sheriff 20% Police Allocations within the percentages are not yet finalized (e.g., by population, minimum guarantees, etc.). (4) MOE and non-supplant language. Funds from the '/ cent may not supplant existing funding. A maintenance of effort (MOE) with a base year of 2000-2001, would be in place in order to draw down the new '/ cent revenues. Any reduction in the MOE will result in a commensurate reduction in sales tax revenues. (5) Anti-Terrorism plan. In order to receive the funds, local governments will have to adopt (and annually evaluate and update) an Anti-Terrorism and Public Protection Plan with prescribed elements such as identification of needs and description of proposed program expenditures. (6) Identification and protection of public safety funds. Local governments will be required by Feb. 15'h of each year to identify all funding on public safety and state-mandated services, as defined, and to identify the sources of revenue for the services (e.g., 46% of VLF, 82% of property tax, etc). These funds are then protected from reduction by the state. In addition, the state may not increase costs in mandated programs without reimbursement. (7) Restoration of cuts. Funds will be appropriated to restore any reductions made by the Legislature during the 2002-2003 budget year. These funds will be repaid during the 2003-2004 budget year. (The language in the draft is still being revised.) (8) Definition of programs included. The definition of public safety services includes all direct and indirect costs to county general fund programs that are conducting public safety related services. The steering committee is charged with a difficult task, potentially changing in a very short time the work we have spent the last year diligently researching and completing. However, each and every action we have taken has in fact been of use and has taken us to the table in these negotiations as we have never been before. If this committee and the board agree to move forward with Option 3, it will create an historical coalition of local government governing bodies, management, labor, fire and law enforcement the strength of which is unparalleled. ATTACHMENT Section 1. This measure shall be known and may be cited as the Anti-Terrorist and Public Protection Act of 2002. Section 2. The people find and declare as follows: (a) The events of September 11, 2001 have significantly increased the public security and anti- terrorism responsibilities of local public law enforcement, fire protection and emergency services agencies, and have added to the demands on local emergency and trauma centers and public health facilities. Adequate funding for these additional services is essential for the safety and security of the citizens of California. (b) These services are primarily the obligation of local government and local officials who must give public protection the highest priority. Traditional local government revenues have been shifted away or re-directed to other programs in recent years by the State, imperiling the base of funding necessary to insure the fiscal integrity of public health and safety agencies. (c) The people enact this measure in order to insure that revenue now dedicated to local governments is available to public health and safety agencies and to provide an additional source of revenue dedicated solely for these purposes. Section 3. Article XIII of the California Constitution is hereby amended by adding Section 36 to read as follows: Section 36. (a) In order to assist local governments in funding public safety services to protect the public from terrorist activities, and in addition to any other sales and use taxes in effect on the date this measure is enacted, the following sales and use taxes are hereby imposed: (1) For the privilege of selling tangible personal property at retail, a tax is hereby imposed upon retailers at the rate of/4 percent of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in this State on and after January 1, 2003. (2) An excise tax is hereby imposed on the storage, use, or other consumption in this state of tangible personal property purchased from any retailer on and after January 1, 2003 for storage, use, or other consumption in this State at the rate of '/4 percent of the sales price of the property. For the purposes of this section, "local government" means city, county, city and county, and special district (b) Except for sections rplaceholder for explanation of situs/population/other method of distributing sales tax], the Sales and Use Tax Law, including any amendments made.thereto on or after the effective date of this measure, shall be applicable to the taxes imposed by subdivisions (a). (c) (1)All revenues derived from taxes imposed pursuant to subdivision(a), with the exception of payment of refunds made pursuant to Article 1 (commencing with section 30361)of Chapter 6 of the Revenue and Taxation Code and reimbursement of the Board of Equalization for administration and collection expenses shall be continuously appropriated to the Anti-Terrorism and Public Protection Fund which is hereby created in the State Treasury by this subdivision, for allocation by the Board of Equalization in accordance with the following formula: A. Three percent to the California Highway Patrol; B. Three Percent to the California Department of Forestry; C. Six percent to counties and cities for distribution to county public health departments and city health departments which provide public health services on the effective date of this Act; D. Eighteen percent to counties for the exclusive use of trauma care and emergency room facilities E. Twenty-eight percent to counties, cities and special districts that provide fire protection services F. Twenty percent to counties for county sheriff services G. Twenty percent to cities and special districts that provide police services (2) [place holder for formula distribution within each category A through G] (d) A local government shall appropriate the revenues received pursuant to subdivision (c) for eligible expenditures only. "Eligible expenditure" shall mean salaries and benefits including overtime; training; equipment, including vehicles; medications ; supplies; telecommunications, including wireless systems; capital outlay; contract services and public information, for the purposes described in subdivision(c)(1)(A) — (G). (e) (STATUTE)Prior to receiving fan& revenues pursuant to subdivision (c), a local government shall do both of the following: (1) establish an Anti-Terrorism and Public Protection Fund (ATPPF), and (2) adopt, and evaluate and update annually, an Anti-Terrorism and Public Protection Plan as more fully described in subdivision(f). A local government shall deposit all revenues received pursuant to subdivision (c) in its ATPPT. All such revenues, and all investment earnings, including interest on deposited revenues, shall be appropriated exclusively for the purposes specified in subdivision (d) and shall be used only to supplement levels of service existing in the base year. For purposes of this section, "base year" shall be the fiscal year 2000-2001. (f) (STATUTE)Each Anti-Terrorism and Public Protection Plan shall include the following elements: (1) An assessment of existing law enforcement, fire protection,public health, and emergency medical resources available to address terrorist threats and public safety; (2) An identification of impediments to an effective and coordinated response to potential terrorist threats; (3) An identification of programs proposed to be funded under the Plan and the projected amount of funding for each program; (4) A strategy that provides for prevention and response to potential terrorist activity, including coordination with other public agencies. (5) An assessment of additional resources needed to address public health terrorist threats and public safety risks from potential terrorist activity. (g) Revenues derived from the taxes imposed pursuant to subdivision (a) shall not be considered proceeds of taxes for purposes of Article XIII B or state General Fund proceeds of taxes within the meaning of Article XVI. (h) (STATUTE) Commencing with the 2003-2004 fiscal year, any local government that funds eligible public safety services as defined in subsection (d) from existing Local Financial Resources in an amount for the fiscal year that is less than the amount appropriated for eligible public safety services in the 2000- 2001 fiscal year ("base year amount"), shall have its total fiscal year allocation from the revenues distributed in accordance with subdivision (c) reduced by the difference between those amounts. Provided, however, that a local government's base year amount shall be (A) adjusted by the amount equal to the amount of local financial resources transferred pursuant to section 3(a) of Article XIIIB; and (B) reduced by the amount of local financial resources derived from any local financial resource that is subsequently determined by a final court decision to be unlawfully levied or collected or which is eliminated or reduced by action of the voters of the local government. (i) Any amount not allocated to a county as a result of subdivision (h) shall be allocated to the remaining local governments in that county in proportion to the total fiscal year allocations otherwise received by those local governments pursuant to subdivision (c). Any amount not allocated pursuant to subdivision (h) to any local government that is not a county shall be allocated to the county. (j) (1) Annually on or before February 15, each local government shall establish and adopt its Public Safety and Unreimbursed Mandated Services Total for the immediately preceding fiscal year. The Public Safety and Unreimbursed Mandated Services Total shall identify the total amount of each Local Financial Resource that has been appropriated for the"direct and indirect costs of Public Safety Services and for Unreimbursed Mandated Services, as a percentage of total fiscal year appropriations ("Public Safety and Unreimbursed Mandated Services Percentage"). (2) For purposes of this subsection: (i) "Public Safety and Unreimbursed Mandated Services Total" shall mean the cumulative amount of Local Financial Resources, appropriated for Public Safety Services and Unreimbursed Mandated Services. (ii) "Unreimbursed Mandated Services" shall mean programs and services mandated on local governments by federal and state governments for which no reimbursement is received by local governments. (iii) "Public Safety Services" shall have the meaning set forth in subsection (k)(2). (2) Within ten (10) days of adopting the Public Safety and Unreimbursed Mandated Services Total, each local government shall send a copy of the Total to the State Controller. (3) The Legislature and any state agency shall not reduce any Local Financial Resource that is appropriated as part of a local government's Public Safety and Unreimbursed Mandated Services Total for the previous fiscal year, in excess of the percentage of that Local Financial Resource that is not appropriated for Public Safety Services and Unreimbursed .Mandated Services. (4) Whenever the Legislature or any state agency increases a local government's share of Unreimbursed Mandated Services, the State shall provide a subvention of funds to reimburse the local government for the costs of the increased share pursuant to section 6 of Article XIIIB. (5) There is hereby appropriated to the State Controller from the State General Fund for.the 2003-2004 fiscal year, for distribution in accordance with this subdivision, an amount equal to the amount by which any local government's Local Financial Resources were reduced during the period January 1, 2002 through and including the effective date of this Act, by action of the Legislature or any state agency, in excess of the percentage of that Local Financial Resource that the local government did not appropriate for Public Safety Services and Unreimbursed Mandated Services ("Reduction').. On or before September 1, 2003, the State Controller shall distribute from the amount so appropriated, an amount to each local government equal to that local government's Reduction. (6) (STATUTE) On or before July 1, 2003, the State Controller, in consultation with the League of California Cities, the California State Association of Counties, and the California Special Districts Association, shall prepare and develop guidelines for the implementation of subdivision (j)(1) by local governments. The guidelines shall include criteria for identifying both (A ) the Local Financial Resources that are appropriated for Public Safety Services and Unreimbursed Mandated Services and(B) Unreimbursed Mandated Services. (k) (STATUTE) For purposes of this section, (1)"Local Financial Resources" means any source of state or local revenue, including but not limited to, state subventions; the ad valorem tax on real property; and locally approved taxes, fees and assessments appropriated for public safety services as defined in subdivision (d ), but shall not include any of the following amounts: (A) Grant funds received by a local government from any source. (B) Asset forfeiture revenues received by a local government. (C) Appropriations by a local government for one-time expenditures. (D) Revenues received and expended by a local government pursuant to a contract under which the local government provides public safety services for another jurisdiction. (E) Revenues derived from any source by a local government to respond to a state of emergency declared by the Governor pursuant to the California Emergency Services Act (Chapter 7 (commencing with Section 8550) of Division 1 of Title (F) Any amount expended by a local government in the base year to fund retirement costs that are not attributable to any change in benefit levels. (2) "Public Safety Services" shall mean: (A) Police, sheriff and fire protection. (B) Emergency medical services and office of emergency services. (C) Criminal justice, including costs associated with probation and incarceration. (D) Public health. (E) Crisis response for persons posing a threat to the public. (F) Child and adult protective services. (G) Prevention and response for threats to the environment, including hazardous materials activities. (H) Trauma and emergency room services. (I) Coroner. (J) Substance abuse services. (K) Food, air, and water safety. (L) Vector and animal control. (M) Inspection and code enforcement for life and safety protection. (N) Airport and port security. Section 4. Construction. This measure shall be liberally construed to effectuate its purpose of providing adequate funds to local governments to fund public safety services. This measure shall not be construed .to provide independent authority to the Legislature or any entity of state government to reduce or reallocate revenues or funds derived from locally adopted taxes, fees, assessments, or charges and shall be applied in a manner that does not have a fiscal impact upon the amounts of revenue otherwise required to be applied by the State for the support of school districts and community college districts pursuant to Section 8 of Article XVI of the California Constitution. Section,5. Severability. If any part of this measure or the application to any person or circumstance is held invalid, the invalidity shall not affect other provisions or applications that reasonably can be given effect without the invalid provision or application.