2003-005-Urging The California Legislature To Reject The Governor’s Proposed Shift Of Local Vlf Revenue And To Honor The 1998 Commitment To Restore The VlfRESOLUTION 2003 - 005
RESOLUTION BY THE TOWN OF LOS GATOS URGING THE CALIFORNIA
LEGISLATURE TO REJECT THE GOVERNOR'S PROPOSED SHIFT OF LOCAL VLF
REVENUE AND TO HONOR THE 1998 COMMITMENT TO
RESTORE THE VLF
WHEREAS, prior to 193.5, cities and counties collected property taxes on motor vehicles to fund
.essential local public health and .safety services; .and
WHEREAS, in 1935, the Legislature first enacted the Vehicle License Fee (VLF) Act, replacing the
property tax on vehicles with a 1.75 percent fee charged against the value of the motor vehicle; and
WHEREAS, in T948, the rate of the VLF was increased to 2 percent of the value of the vehicle; and
WHEREAS, in 1986, the voters voted overwhelmingly to constitutionally dedicate the proceeds of the
VLF to fund city and county services; and
WHEREAS, in 1998., a period of strong economic growth., the Legislature approved the use of a portion
of the rapidly growing state General Fund to reduce the VLF payments of vehicle owners. This amount,
known as the "offset", grew in future years to a 67.5 percent offset against the amount owed. The
.amount paid to local governments in lieu of the reduced VLF payment is known as the "VLF backfill";
:and
WHEREAS, the 1998 legislation and subsequent enactments contain clear provisions that when
insufficient funds are available to be transferred from the General Fund to fully fund the offsets and
backfill amount that the VLF offset shall be reduced and VLF payments increased; and
WHEREAS, VLF and backfill revenues constitute 15 to 25 percent of typical city and county general
purpose revenues. On average, more than 60 percent of city general fund spending and more than half of
county general funds go to front line law enforcement, fire, emergency medical services, and health care
programs.
WHEREAS, revenues derived from the VLF and backfill are of critical importance in funding vital local
public health and safety services; and
WHEREAS, any failure by the Legislature to maintain the VLF backfill or restore the VLF will cause
widespread disruption in local government services essential to the well-being of California citizens and
their cities :and counties; and
WHEREAS, Governor Davis' proposal to divert $4 billion in local VLF backfill payments over the next
17 months fai s to honor the 1998 commitment and is a direct assault on local services that will be felt by
every California resident; and
WHEREAS, shifting $4.2 billion in locally controlled revenues for local services is neither equitable nor
fair. No state program or department has been asked to shoulder such a disproportionate share of the
budget pain. These cuts come on top of the nearly $5 billion each year that is transferred from local
services to fund state obligations.
NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF LOS GATOS,
CALIFORNIA, that if the state General Fund can no longer afford the expense of part or all of the VLF
"backfill" that the Legislature and Governor of California are hereby respectfully urged to implement the
provisions of current law providing for the reduction of the VLF offset in bad economic times and to
restore the VLF to its normal level.
RESOLVED FURTHER, that the Town of Los Gatos California hereby expresses its profound
appreciation to the legislators who support such VLF restoration legislation.
PASSED AND ADOPTED at a special meeting of the Town Council of the Town of Los Gatos,
California, held on the 17`" day of January, :2003 by the following vote:
COUNCIL MEMBERS:
AYES.: Diane McNutt, Mike Wasserman, Mayor Sandy Decker
NAYS: None
ABSENT: Steve Glickman and Joe Pirzynski
ABSTAIN: None
SIGNED:
'OR OF'r
GATOS,
ATTEST:
CLERK OF THE TOWN OF LOS ATO
LOS GATOS, CALIFORNIA
TOWN OF LOS GATOS