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CC – Item 3D – Staff Report – Urgency Action to Consider Resolution 98-14 – Opposing State Efforts to Repeal Vehicle License Fees S {: _ % st of __report TO: HONORABLE MAYOR AND MEMBERS ROSEMEAD CITY COUNCIL FROM: FRANK G. TRIPEPI, CITY MANAGER DATE: APRIL28, 1998 RE: URGENCY ACTION TO CONSIDER RESOLUTION NO. 98-14 - OPPOSING STATE EFFORTS TO REPEAL VEHICLE LICENSE FEES Late yesterday, the City's Legislative Advocate faxed the attached memorandum stating that the Governor's Office has made the repeal of vehicle license fees (VLF) a leading priority during this year's State budget process. At stake is nearly $600 million annually,much of which is received by local governments. The City of Rosemead alone receives$2 million (more than 22% of the current general fund budget) in vehicle license fees each year. To date, Assemblymember McClintock.and others supporting the elimination of the VLF, have stated that they intend to provide a"backfill" for revenues lost by local governments. However, unless such revenues are constitutionally protected. those revenues earmarked for local governments will be distributed at the whim of the Legislature. During periods of economic downturn, or other unforeseen events, it is likely that those revenues to cities would be reduced or eliminated. In light of the issues stated above,and because the Legislature will begin discussing this issue before the next regularly scheduled City Council meeting on May I I, 1998, staff is requesting that the City Council amend the agenda to consider Resolution 98-14 as an urgency item and approve the staff recommendation. The City's Legislative Advocate recommends that a copy of the resolution be forwarded to the members of the Assembly Revenue and Taxation Committee by May 1 I. 1998. Assemblymember McClintock's bill will he discussed at that time. Attached is a copy of the memorandum and background information from Anthony Gonsalves and Resolution No. 98-14. To consider the item, it will he necessary for the City Council to (1) amend the agenda to include consideration of Resolution 98-14 because of the necessity to take action of this issue before the next regularly scheduled City Council meeting and (2) vote on the staff recommendation. A 4/5 majority vote is required to amend the agenda. COUNCIL. AGENDA APR 2 81999 ITEM No. id . D • RESOLUTION NO. 98-14 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROSEMEAD OPPOSING THE EFFORTS OF THE CALIFORNIA LEGISLATURE TO ELIMINATE VEHICLE LICENSE FEES WHEREAS, in light of a currently sound statewide economy and projected windfall tax revenues, the State Legislature and Governor's office are exploring the possibility of eliminating vehicle license fees in the State of California; and WHEREAS, vehicle license fees have proven to be among the most stable sources of revenue for local governments since the passage of Proposition 13 in 1978, as indicated by the fact that the City of Rosemead receives more than 22% of its $9 million general fund budget in the form of vehicle license fees; and WHEREAS, vehicle license fees in recent years has proved to be the foundation of available revenue sources used by local governments to fund necessary police, fire and other public safety services; and WHEREAS, though there has been discussion of"backfilling"the revenues lost by local governments,the City Council of the City of Rosemead does not believe that the Legislature is in a position to commit scarce discretionary revenues to local governments, especially during the inevitable periods of economic downturn; and WHEREAS, the plausibility of gaining legislative and voter approval of a Constitutional Amendment to protect revenues for local governments is highly unlikely in this era of cynicism toward government and its motives; and WHEREAS, in the wake of a devastating statewide recession during the early years of this decade, it appears overly optimistic to count on an unabated stream of tax revenues at the State level in lieu of vehicle license fees. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ROSEMEAD DOES HEREBY RESOLVE: L To oppose the current effort to rescind vehicle license fees in California unless the Legislature can ensure a simultaneous Constitutionally protected source of funds to "backfill" revenues lost by local governments. 2. Authorize the Mayor to send all necessary correspondence to the State Legislature and Governor's office stating the Council's opposition. 3. Authorize the City Clerk to send certified copies of this resolution to the League of California Cities, the California Contract Cities Association and other entities interested in protecting the current vehicle license fee. DONE THIS 28TH DAY OF APRIL, 1998. RPR 27 '98 24: 11P1 GONSALVES & SON P. 1/5 4. Joe A. Gonsalves Anthony EDGB25LET.•SUI IX GonsalvesDK +) If 11 PARK EXECUTIVE BL .• TE 250.SACRAMENTO,CA 65914-0904 %If•441-1166? • • • MX B16.4415061 1? 1I' FAX COVER SHEET DATE: April 27. 1998 TIME: TO: City Manager FROM: Joe and Anthony Gonsalves NUMBER OF PAGES: 5 INCLUDING COVER SHEET MESSAGE: Urgent memo regarding Vehicle License Fee Legislation. Sacramento Bee newspaper article. and a list of the Assembly Revenue and Taxation Committee Members. FAX NUMBER (916) 441-5061 INFORMATION TELEPHONE NUMBER (916) 441-0597 APR 27 '99 04: 11=M GONSALVES & SON P.2/5 Joe A. Gonsalves i • Anthony D. Gonsalves +Irill PARKOFEXEOUAL B IOSL TIVE REPRESENTATION i� 925 L ST•SUITE 250.SACRAMENTO,CA 95914-2>0' BIG•441-0597 • • • FAX 9I6.4tlSU61 iI I . J T0: City Manager FROM: Joe and Anthony Gonsalves DATE: April 27, 1998 RE: Vehicle License Fee Legislation Attached is a copy of a newspaper story that appeared in the Sacramento Bee on Saturday, April 25, 1998 . The sounds coming from the Governor's office, until now, have been that there would probably be no support for this proposal of eliminating the vehicle license fee. However, as you can tell by the story in the Bee, it states that the administration officials have said the idea is a leading priority as they make final adjustments to the proposed new State budget. According to the newspaper story, the Howard Jarvis tax group has mailed out thousands of petitions on this issue, and has directed supporters to telephone the Governor's office. Assemblyman McClintock' s office has petitions with 10, 000 signatures backing the proposal , according to Chief of Staff Kirk Hudson. It is extremely urgent that we respond to this immediately. The first thing I recommend you do is get the support of your safety members, your police department, and your fire department. If you are contracting with the county, make sure that your county sheriff' s office is in support of your position. Make sure that your fire department is in support of your position, and make sure they communicate their opposition to this proposal to the Governor's office and to the Legislators in their district. The second recommendation I have is that the Mayor and the Council Members individually, and collectively by resolution of the City Council, express their strong opposition to Governor Pete Wilson and to the Members of the Legislature who represent them. APR 27 '98 04:11°M GONSPLVES & SON P.9/5 I would recommend each Mayor and Council Member take the time to call their Senator and Assemblymember. Talk to them personally about this, and urge them to oppose this proposal. I believe it would be important for you, the City Managers, to provide information to your Mayor and Council Members, and your fire and police departments, as to the impact on the city unless this proposal is defeated. I would provide them with dollar amounts, percentages of your budget, and any other adverse affects that would take place by the imposition of this onerous proposal. Remember, at this time the Governor is not yet supporting this proposal. The Governor's office ie gathering all the information they can before deciding on what will and will not be in the State budget. So, it is very important you immediately communicate your opposition, and with great numbers, to offset what ie being done by the other side. The McClintock bill, AH 1776, is tentatively set for hearing on Monday, May 11 in the Assembly Revenue and Taxation Committee at 1:30 p.m. in room 126. I have attached the names of the Chairman, the Members of the Committee, the room numbers, fax numbers, and telephone numbers . It is critical that they hear from you immediately, and constantly, until the day of the hearing. In addition, the city should send someone to represent them at the hearing in opposition to AS 1776 . 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