HomeMy WebLinkAboutLegislative Review - SB 1060 (Campbell) Exchanging Local Sales and Use TaxCITY OF PALM DESERT
COMMUNITY SERVICES DEPARTMENT
STAFF REPORT
REQUEST: CONSIDERATION OF LEGISLATIVE REVIEW COMMITTEE
ACTION ON SB 1060 (CAMPBELL) AT ITS MEETING OF MARCH
22, 2005
DATE: April 14, 2005
CONTENTS: SB 1060 Language
Recommendation:
By Minute Motion, concur with the action taken by the Legislative Review Committee at its
meeting of March 22, 2005, and direct staff to prepare a letter of opposition for the Mayor's
signature with regard to SB 1060 (Campbell) relative to exchanging local sales and usetax
allocations for ad valorem property tax allocations.
Executive Summary:
Passage of SB 1060 would enact statutory changes to authorize local agencies to
exchange allocations of sales and use taxes for property tax revenues.
Background:
The California Constitution prohibits the Legislature from restricting the authority of local
agencies to impose a tax rate or change the method of distributing revenues derived under
the Bradley -Burns Uniform Local Sales and Use Tax Law except in specified
circumstances. One exception to this prohibition allows the Legislature to authorize two
or more specifically identified local agencies within a county, with the approval of the
governing body of each of those agencies, to enter into a contract to exchange allocations
of ad valorem property tax revenues for revenues derived from a tax rate imposed under
the Bradley -Burns Uniform Local Sales and Use Tax Law. SB 1060 would state the intent
of the Legislature to enact the necessary statutory changes to authorize local agencies
within a county to contract to exchange allocations of local sales and use tax revenues for
allocations of ad valorem property tax revenues.
During the past several sessions of the State Legislature, the City of Palm Desert has
consistently opposed any proposed legislation that would alter the manner in which sales
and use taxes are collected and/or distributed, as these funds are needed locally to pay
for public safety and public works programs and services. The spirit of Proposition 1A,
which was approved by the voters last November, was that local revenues would be
protected from raids with the promise that the manner in which sales tax was distributed
would remain unchanged. In addition, the language of SB 1060 would require that the City
of Palm Desert contract with the County of Riverside to negotiate such an exchange and
in order for it to be revenue neutral, Riverside County would have to agree to release a
much larger "take" of property taxes to Palm Desert than are currently received by the City.
Because SB 1060 appears to be yet one more attempt by the State to shift sales tax
allocations, the Legislative Review Committee recommends that the City Council oppose
SB 1060 and direct staff to prepare a letter stating that position to appropriate legislators
for the Mayor's signature.
PATRICIA SCULLY, Cry
SENIOR MANAGEMENT ACLYST
ASSISTANT CITY
R/PIO
t\j1 P
PAUL S. GIBSON
DIR OF FINANCE/CITY TREASURER
CARLOS L. ORT A
CITY MANAGER
SB 1060 Senate Bill - INTRODUCED ( -"
Page 1 of 2
BILL NUMBER: SB 1060 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Campbell
FEBRUARY 22, 2005
An act relating to local government finance.
LEGISLATIVE COUNSEL'S DIGEST
SB 1060, as introduced, Campbell. Local government finance:
exchanging local sales and use tax allocations and ad valorem
property tax allocations.
The California Constitution prohibits the Legislature from
restricting the authority of a city, county, or city and county to
impose a tax rate under, or change the method of distributing
revenues derived under, the Bradley -Burns Uniform Local Sales and Use
Tax Law, except in specified circumstances. One exception to this
prohibition allows the Legislature to authorize 2 or more
specifically identified local agencies within a county, with the
approval of the governing body of each of those agencies, to enter
into a contract to exchange allocations of ad valorem property tax
revenues for revenues derived from a tax rate imposed under the
Bradley -Burns Uniform Local Sales and Use Tax Law.
This bill would state the intent of the Legislature to enact the
necessary statutory changes to authorize local agencies within a
county to contract to exchange allocations of local sales and use tax
revenues for allocations of ad valorem property tax revenues.
Vote: majority. Appropriation: no. Fiscal committee: no.
State -mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The people of the State of California find and declare
all of the following: (a) People have the most power to control
government at the local level.
(b) Local government is far more efficient and responsible than
state government in the use of tax revenues.
(c) Police protection, fire protection, local community services,
and schools must have an adequate, reliable, and guaranteed source of
funding.
(d) Historically, property tax revenues were used to pay for local
community services. These tax revenues have been largely taken by
the state government, leaving local governments with a very small
share of property tax revenue.
(e) Allowing local communities to keep more property tax revenues
will safeguard funds for police and fire protection and other vital
services.
(f) Allowing local government to make property tax revenues the
principal source of revenue will require new residents in a community
to pay their fair share of police, fire, parks, health care, and
other municipal services by contributing their property taxes to the
city and county where they live.
(g) The people of California have recently enacted historic
http://info.sen.ca.gov/pub/bill/sen/sb—1 05 1 -11 00/sb1060_bill 20050222_introduced.html 2/25/2005
SB 1060 Senate Bill - INTRODUCED
Page 2 of 2
constitutional protections for local government revenues. These
reforms will put an end to raids on local funds by the state and give
local governments better control over their own finances, including
permitting local agencies to exchange allocations of local sales and
use tax revenues for allocations of ad valorem property tax revenues.
(h) It is the intent of the Legislature to enact the necessary
statutory changes to implement subparagraph (C) of paragraph (2) of
subdivision (a) of Section 25.5 of Article XIII of the California
Constitution, to authorize local agencies within a county to contract
to exchange allocations of local sales and use tax revenues for
allocations of ad valorem property tax revenues.
http://info.sen.ca.gov/pub/bill/sen/sb_l051-1100/sb_l060 bill 20050222_introduced.hbW 2/25/2005