04 Staff Report - Transportation Funds to Finance State OperationspW H p~
~o , us COUNCIL AGENDA REPORT
S G A'~
MEETING DATE: 8/4/2008
ITEM NO:
DATE: AUGUST 1, 2008
TO: MAYOR AND TOWN COUNCIL
PROM: GREG LARSON, TOWN MANAGER
~y
SUBJECT: ADOPT A RESOLUTION OPPOSING THE BORROWING OF LOCAL GOVERNMENT,
REDEVELOPMENT, AND TRANSPORTATION FUNDS TO FINANCE STATE
OPERATIONS
RECOMMENDATION:
It is recommended that Council adopt the attached resolution opposing the borrowing or seizing of local
government, redevelopment, and transportation funds to finance State operations.
DISCUSSION:
On July 18, 2008, Governor Schwarzenegger confirmed that in response to its $15.2 budget deficit, the State
legislature may enact Proposition 1 A provisions, allowing the state to "borrow" protected local government funds
in the event of a severe State hardship. If local government funds are borrowed by the State, Proposition lA
requires that they must be repaid within 3 years with interest. Governor Schwarzenegger also stated that he does
not support additional borrowing to balance the State budget.
The League of California Cities is encouraging the State legislature to use State funds rather than local
government funds to finance State operations. As a result, the League has requested that Town/City Councils
communicate this direction to State officials by adopting the attached resolution opposing the borrowing or
seizing of local government funds to finance State operations.
Should Council adopt the attached resolution, a copy of the resolution will be forwarded to the League of
California Cities and state representatives.
FISCAL IMPACT:
There is no financial impact associated with the adoption of this resolution.
Attachment:
Resolution opposing the borrowing of local government, redevelopment, and transportation funds to finance State
operations.
Distribution: League of Ca is Cities Governor Schwarzenegger, State Legislative Division
PREPARED BY: MA
ssis a o the n Manager
N:WGRVHaruyama\StafFRepo rts 00 udgetResolutionStaff Report.doc
Reviewed by: Assistanx Town Manager
Clerk Administrator W Finance _
Attorney
:y Development
RESOLUTION
A RESOLUTION OF THE TOWN OF LOS GATOS OPPOSING THE
BORROWING OR SEIZING OF LOCAL GOVERNMENT, REDEVELOPMENT,
AND TRANSPORTATION FUNDS TO FINANCE STATE OPERATIONS
WHEREAS, in 2004 by an 84% margin of approval, California voters approved
Proposition 1 A to prohibit the use of local government funds by the State government to
finance its budget; and
WHEREAS, in 2006 by a 77% margin of approval, California voters also
approved Proposition 1A, which provides similar protections to transportation funding
for state and local transportation projects, including important street maintenance and
public transit programs; and
WHEREAS, the Proposition IA ballot measures allow the State to borrow local
government funds in the event of a "severe state of fiscal hardship," which must be repaid
in three years with interest; and
WHEREAS, on July 1, 2008 the California State Legislature failed to meet its
constitutional budget deadline; and
WHEREAS, the state legislature is considering enacting the Proposition lA
provision which allows the State to borrow or seizing local government, redevelopment,
and transportation funds to balance the State budget; and
WHEREAS, the Governor and the Legislative Budget Conference Committee
recommended a balanced budget that does not rely on "borrowed" local government
property tax, redevelopment tax increment and transportation sales tax funds; and
WHEREAS, borrowing local government, redevelopment, and transportation
funds would further deepen the State's existing structural deficit and jeopardize local
government and public safety services, transportation projects, community revitalization
programs, and infrastructure maintenance.
NOW, THEREFORE, BE IT RESOLVED that the Los Gatos Town Council
hereby opposes the borrowing or seizing of local flax funds, redevelopment tax increment
and transportation sales tax fluids by the state government to finance state operations.
BE IT FURTHER RESOLVED that the Town Manager is hereby directed to
send this resolution to the Government and State Legislators.
PASSED AND ADOPTED at a regular meeting of the Town Council of the
Town of Los Gatos, California, held on the 4a' day of August, 2008 by the following
vote:
COUNCIL MEMBERS:
AYES :
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA