04 Staff Report - Measure Supporting Proposition 42~pW N 0
!ps GA
DATE:
TO:
FROM:
SUBJECT:
MEETING DATE: 3/6/2006
ITEM NO. LI
COUNCIL AGENDA REPORT
MARCH 6, 2006
MAYOR AND TOWN COUNCIL
DEBRA J. FIGONE, TOWN MANAGER
ADOPT RESOLUTION SUPPORTING A MEASURE TO SECURE
PROPOSITION 42 FUNDING FOR STATE AND LOCAL
TRANSPORTATION PROJECTS
RECOMMENDATION:
Adopt resolution (Attachment No. 1) supporting a constitutional amendment on the November 2006
ballot to ensure that Proposition 42 funds are used exclusively for state and local transportation
projects.
PURPOSE:
The purpose of this staff report is to discuss the proposed resolution and provide a brief assessment
of its potential impact on towns and cities.
BACKGROUND:
In February 2002, the Town Council adopted a resolution supporting Proposition • 42, the
Transportation Congestion Improvement Act, which was passed by voters in March 2002.
Proposition 42 required that all motor vehicle fuel sales tax revenue be allocated for specified state
and local transportation purposes, including congestion relief, road repairs, and transit and safety
improvements.
When Proposition 42 was passed, it included a provision that allowed the Governor and State
Legislature to suspend transportation funds to state and local agencies in the event of a fiscal
emergency. According to the League of California Cities and transportation/traffic coalitions, the
State has misused the fiscal emerg~aNy provision and suspended $2.5 billion in Proposition 42
PREPARED BY:
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Reviewed by: k5)-Assistant Town Manager AI-Town Attorney Clerk Administrator
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Reformatted: 5/30/02
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SUBJECT: ADOPT RESOLUTION SUPPORTING A MEASURE TO SECURE
PROPOSITION 42 FUNDING FOR STATE AND LOCAL
TRANSPORTATION PROJECTS
March 6, 2006
funding to cover non-transportation state expenditures. Although the State indicates that it will repay
the suspended transportation funding, it is uncertain as to when or if the repayment would occur.
The League is also concerned that the State will suspend future Proposition 42 funding.
Therefore, the League has requested that the Town and other local governments adopt a resolution
to amend the fiscal emergency provision by supporting a measure to permanently secure Proposition
42 funding for local and state transportation projects.
DISCUSSION:
The suspension of over $2.5 billion in Proposition 42 funding from state and local agencies has
delayed or stopped many state and local traffic safety improvements, congestion relief prof ects, road
repairs and other pressing transportation needs. As of FY 2002/03, the Town has received
approximately $134,046 in Proposition 42 funding. However, according to the California City
Finance organization, it is estimated that the Town should have received an additional $241,650 in
transportation funds.
Transportation coalitions are collecting signatures to qualify for a constitutional amendment on the
November 2006 ballot to secure all Proposition 42 funding for state and local transportation proj ects:
If passed, the proposed measure would prevent the Governor and Legislature from suspending or
diverting Proposition 42 funding for non-transportation expenses. The proposed measure would also
require the State to reimburse state and local agencies $2.5 billion in suspended Proposition 42
funds, which would be paid over a period of 10 years to minimize any immediate fiscal impact on
the State General Fund.
CONCLUSION:
It is recommended that the Council adopt the attached resolution supporting a constitutional
amendment on the November 2006 ballot to ensure that Proposition 42 funds are used exclusively
for state and local transportation projects.
FISCAL IMPACT:
Adoption of this resolution would support the reimbursement of revenues previously used to offset
non-transportation purposes and ensure the continued receipt of Proposition 42 funding for state and
local transportation agencies in future years. Since FY 2002/03, the Town has received an estimated
$134,046 in Proposition 42 funding. If the proposed ballot measure was approved by voters, it is
anticipated that the Town would be repaid approximately $241,650 in transportation funds.
Attachments: Resolution Supporting a Measure to Secure Proposition 42 Funding for State and
Local Transportation Projects
Distribution: League of California Cities, Rebecca Elliot, Peninsula Division Grassroots Coordinator
RESOLUTION NO.
RESOLUTION BY THE TOWN OF LOS GATOS SUPPORTING A MEASURE TO SECURE
PROPOSITION 42 FUNDING FOR STATE AND LOCAL TRANSPORTATION PROJECTS
WHEREAS, the Town of Los Gatos engages in periodic capital improvement assessments and planning relating to the
condition of its transportation infrastructure; and
WHEREAS, the Town ofLos Gatos is concerned that it is not able to maintain its transportation infrastructure consistent
with public works best practices because of limited funding availability; and
WHEREAS, constraints on the Town's ability to fully fund local transportation infrastructure projects adversely affect
residents, visitors, and businesses within the City; and
WHEREAS, the Town had anticipated receiving monies for this purpose as the result of Proposition 42, approved by
the state's voters in March 2002, which dedicated the state sales tax paid on gasoline to state and local transportation infrastructure
projects and programs; and
WHEREAS, Proposition 42 contains a provision that allows the state to transfer the sales tax on gasoline to non-
transportation state purposes during times of fiscal need; and
WHEREAS, as a result, some $2.5 billion in Proposition 42 monies has been spent over the past three years for non-
transportation purposes; and
WHEREAS, a measure is being circulated to qualify a constitutional amendment for the November 2006 ballot that
would ensure that future revenues raised by Proposition 42 are dedicated to state and local transportation projects only; and
WHEREAS, the measure also requires the state to reimburse the $2.5 billion in funds previously spent on non-
transportation expenses to be repaid in 10 years; and
WHEREAS, ensuring that Proposition 42 revenues are used solely for transportation projects, along with the
reimbursement of prior revenues, will greatly assist the Town of Los Gatos in meeting its street maintenance obligations to the
benefits of its residents, visitors, and businesses.
NOW, THEREFORE, BE IT RESOLVED, that the Los Gatos Town Council supports a constitutional amendment
to ensure that Proposition 42 revenues are used exclusively for state and local transportation projects, and that revenues previously
used to offset non-transportation purposes be reimbursed.
PASSED AND ADOPTED at a meeting of the Town Council of the Town of Los Gatos, California, held
on the day of , 2006 by the following vote:
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
CLERK ADMEI ISTRATOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
AT I ACIHAIENT 1