The plan simply creates another ERAF plan by a different name. The sales tax growth rate is much higher than the property tax growth rate (thus the states interest in more closely controlling the flow of funds). If we have another recession (which we will if this plan passes) the State, no doubt, will look to the sales tax from local units to bail them out by again balancing their budget on the backs of local units.
If the plan does pass most economic development will cease since there will be no incentive to build additional infrastructure and increase the demands for services when the City does not have the ability to pay for the services. If "land use" is an issue, why not focus on "land use" laws, not finance issues that don't address the problem (What a novell idea! Do the obvious!). If economic development efforts stop this plan quickly becomes a big loser for everyone. Apparently, we can't stand prosperity and the State wants to mandate a recession.
We have already discussed planning for how many employees we will have to layoff if this "Smarter" plan passes. I am surprised the Labor organizations have not spoken out more loudly as of yet since they will be severely impacted when layoffs occur.
These plans should not be titled "Smart" and "Smarter." They should be titled, "Dumb and Dumber".
Marc Puckett
Costa Mesa
Brian Moura wrote:
True on all counts. That's why we're starting up the campaign to
recover not just ERAF, but all 10 types of revenue taken by the
State.(See Mike Garvey's "Got Revenue" talk for details.)
-- Brian Moura, San Carlos
-----Original Message-----
From: Michael Coleman [mailto:[EMAIL PROTECTED]]
Sent: Tuesday, January 18, 2000 5:54 PM
Cc: CSMFO (E-mail)
Subject: Re: [CSMFO Members] ERAF payments"Franz, Robert" wrote:
> Has anyone received this ERAF-loss based payment already, or do you know
> when the State will send it out?Under the provisions of AB1661, the second $75 million will be distributed
based
on "each amount of ad valorem property tax revenue shifted from a local
agency
within the county to the county's Educational Revenue Augmentation Fund for
the
1998-99 fiscal year." The bill provides that the Controller shall allocate
the
ERAF-based amounts to counties no later than Feb 1, 2000. To receive
payment,
each county must have passed an ordinance specifying these amounts before it
can
receive any portion of revenue from the amounts provided in AB1661. Each
county
auditor must then distribute the amounts in proportion to ERAF loss to the
cities, special districts and their county in their jurisdiction.I should emphasize two things here:
1. While these amounts are based on ERAF loss (gross annual in 1998-99),
the
reimbursement does not come back through the ERAF mechanism. It's really
just a
check from the state (via the county auditor) - not a reduction in ERAF.
Moreover, the $75 million amount is a fraction of the gross annual ERAF
shift -
so don't expect to see the full amount of your ERAF shift come back.2. This is a one time deal. There is no provision for future years at this
time, although the bill does contain provisions for an ERAF freeze and state
funding of county property tax administration for schools in FY00-01 and
thereafter - provisions that are dependent on the approval by the electorate
of
a Constitutional Amendment on state and local government fiscal reform in
the
year 2000.3. This is an opportunity (given the current state of the state budget) for
you
to emphasize to public, the media and your legislators the importance of
*permanent* *discretionary* property tax return to your city.--
Michael Coleman ô¿ô
Special Consultant
League of California Cities
[EMAIL PROTECTED]
530-758-3952 phone/FAX
