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PHIL BATCHELOR, COUNTY ADMINISTRATOR r/ Costa
County
DATE: February 24, 1999
SUBJECT: LEGISLATION: AB 550 (TORLAKSON)
SPECIFIC REOUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
RECOMMENDATION:
ADOPT a position in SUPPORT of AB 559 by Assemblymen Tom Torlakson which
would adopt a legislative finding that it is necessary to enact innovative and
systemic solutions to local government fiscal problems that will stabilize the funding
of local government services.
BACKGROUND:
The Board's 1999 Legislative Program contains a provision that the Board will
"Support the efforts of CSAC and the Urban Counties Caucus to at least cap the
growth of ERAF, and preferably begin to return some of the base to counties and
cities."
The Board has previously supported AB 24,AB 304 and SB 155 which all reduce the
amount of the County's contribution to the ERAF.
CONTINUED ON ATTACHMENT: —®YES SIGNATURE:
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RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
APPROVE OTHER
SIGNATURE(S)-
ACTION
IGNATURES:ACTION OF BOARD ON _ Mat„ch-2� s APPROVED AS RECOMMENDED . OTHER
VOTE OF SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A TRUE
XX UNANIMOUS(ASSENT ) AND CORRECT COPY OF AN ACTION TAKEN
AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD
ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN.
ATTESTED M a r c 1999
Contact: PHIL BATCHELOR,CLERK OF THE SOARD OF
cc' SUPERVISORS AND COUNTY ADMINISTRATOR
BY DEPUTY
Assemblyman Torlakson hes introduced AB 550 which, as introduced, contains the
following legislative findings:
The annual shift of ad valorem property tax revenues from
counties,cities,and special districts to educational entities forthe
relief of state government fiscal obligations has been a major
factor in local government budget shortfalls and reductions in
local public services.
Actions by the state to return revenues to counties, cities, and
special districts to mitigate the impact of ad valorem property tax
revenue shifts have not adequately addressed local government
budget shortfalls and service reductions.
It is necessary to enact innovative and systemic solutions to local
government fiscal problems that will stabilize the funding of local
government services.
As introduced, AB 550 does not contain any solution to this problem. However, it
can serve as a vehicle for enacting some fundamental fiscal reform if and when
there is a willingness to move in that direction.
Since Ala 550 is consistent in a general sense with the Board's 1909 Legislative
Program in terms of returning property tax revenue to local agencies, it is
recommended that the Board indicate its support for AB 500,with the understanding
that there will be subsequent substantive amendments that will need to be reviewed
carefully.
cc: County Administrator
Auditor-Controller
Tony Enea, Senior Deputy County Administrator
Assemblyman Tom Torlakson
Room 2003 State Capitol
Sacramento, CA 95314
Les Spahnn
Heim, Noack, Kelly & Spahnn
1121 L Street, Suite 100
Sacramento, CA 95814
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CALIFORNIA LEGISLATURE-I999-2000 REGULAR SESSION
ASSEMBLY BILL No. 550
Introduced by Assembly Member Torlukson
February 18, 1999
An act relating to local government finance.
LEGISLATIVE COUNSEL'S DIGEST
Ala 550, as introduced, Torlakson. Local government
finance: property tax revenue allocation: local agency relief.
Existing property tax law requires the county auditor, in
each fiscal year, to allocate property tax revenue to local
jurisdictions in accordance with specified formulas and
procedures, and generally requires that each jurisdiction be
allocated an amount equal to the total of the amount of
revenue allocated to that jurisdiction in the prior fiscal year,
subject to certain modifications, and that jurisdiction's portion
of the annual tax increment, as defined. Existing property tax
law also reduces the amounts of ad valorem property tax
revenue that would otherwise be annually allocated to the
county, cities, and special districts pursuant to these general
allocation requirements by requiring, for purposes of
determining property tax revenue allocations in each county
for each of the 1992-93 and 1993-94 fiscal years, that the
amounts of property tax revenue deemed allocated in the
prior fiscal year to the county, cities, and special districts be
reduced in accordance with certain formulas. It requires that
the revenues not allocated to the county, cities, and special
districts as a result of these reductions be transferred to the
Educational Revenue Augmentation Fund in that county for
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AB 550 —2—
allocation
2—
allocation to school districts, community college districts, and
the county office of education..
This bill would make legislative findings and declarations
with respect to the impact of reduction and transfer
requirements, state responses to those impacts, and the need
to address local government fiscal concerns.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
The people of the State of California do enact as follows:
1 SECTION 1. The Legislature hereby finds and
2 declares all of the following:
3 (a) The annual shift of ad valorem property tax
4 revenues from counties, cities, and special districts to
5 educational entities for the relief of state government
6 fiscal obligations has been a major factor in local
7 government budget shortfalls and reductions in local
8 public services.
9 (b) Actions by the state to return revenues to counties,
10 cities, and special districts to mitigate the impact of ad
11 valorem property tax revenue shifts have not adequately
12 addressed local government budget shortfalls and service
13 reductions.
14 (c) It is necessary to enact innovative and systemic
15 solutions to local government fiscal problems that will
16 stabilize the funding of local government services.
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