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HomeMy WebLinkAbout09-48 - Severe Fiscal Hardship will Exist if Additional City Property Tax Funds are SeizedRESOLUTION NO. 09-48 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, FINDING A SEVERE FISCAL HARDSHIP WILL EXIST IF ADDITIONAL CITY PROPERTY TAX FUNDS ARE SEIZED AND ADDITIONAL UNFUNDED MANDATES ARE ADOPTED BY THE STATE OF CALIFORNIA. THE CITY COUNCIL OF THE CITY OF COSTA MESA HEREBY RESOLVES AS FOLLOWS: WHEREAS, the current economic crisis has placed cities, including Costa Mesa, under incredible financial pressure and caused city officials to revise already adopted budgets to make painful cuts, including layoffs and furloughs of city workers, decreasing maintenance and operation of public facilities, and reductions in direct services to keep spending in line with declining revenues; and WHEREAS, since the early 1990s, the state government of California has seized over $8.6 billion of city property tax revenues statewide to fund the state budget even after deducting public safety program payments to cities by the state; and WHEREAS, these confiscated revenues would have been used to provide local programs and services that would directly benefit communities; and WHEREAS, in FY 2007-08 alone the state seized $895 million in city property taxes statewide to fund the state budget after deducting public safety program payments, and an additional $350 million statewide in local redevelopment funds were seized in FY 2008-09; and WHEREAS, the most significant impact of taking local property taxes has been to reduce the quality of public safety services cities can provide since public safety comprises the largest part of any city's general fund budget; and WHEREAS, in 2004, California voters adopted substantial constitutional protections for local revenues by an 84 percent vote margin, but the legislature can still "borrow" local property taxes to fund the state budget; and WHEREAS, on May 5 the California Department of Finance announced a proposal to the Governor that the state "borrow" over $2 billion in local property taxes from cities, counties and special districts to balance the state budget, causing deeper cuts in local public safety and other vital services; and WHEREAS, in the past, the Governor has called such "borrowing" proposals fiscally irresponsible because the state will find it virtually impossible to repay and it would only deepen the state's structural deficit, preventing the state from balancing its budget; and WHEREAS, the state legislature is currently considering hundreds of bills, many of which would impose new costs on local governments that can neither be afforded nor sustained in this economic climate; and WHEREAS, state agencies are imposing, or considering, many regulations imposing unfunded mandates on local governments without regard to how local agencies will be able comply with these mandates while meeting their other responsibilities; and WHEREAS, the combined effects of the seizure of the City's property taxes, increasing unfunded state mandates, and the revenue losses due to the economic downturn have placed the City's budget under serious fiscal pressure; and WHEREAS, the City of Costa Mesa simply can not sustain the loss of more property tax funds or be saddled with more state mandates as they will only deepen the financial challenge facing the City; and WHEREAS, a number of the City's financial commitments arise from contracts, including long term capital leases and debt obligations which support securities in the public capital markets, that the City must honor in full unless modified by mutual agreement of the parties. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Costa Mesa, California hereby finds that the City will experience a severe fiscal hardship if the recommendation of the California Department of Finance to "borrow" $2 billion of local property taxes is supported by the Governor and the Legislature. BE IT FURTHER RESOLVED that the City Council of the City of Costa Mesa hereby strongly and unconditionally opposes the May 5 proposal of the California Department of Finance and any other state government proposals to borrow or seize any additional local funds, including the property tax, redevelopment tax increment, and the City's share of the Proposition 42 transportation sales tax. BE IT FURTHER RESOLVED that the City Council of the City of Costa Mesa hereby strongly urges the State Legislature and Governor to suspend the enactment of any new mandates on local governments until such time as the economy has recovered and urges the state to provide complete funding for all existing and any new mandates. BE IT FINALLY RESOLVED that the City Council of the City of Costa Mesa hereby directs the City Clerk to send copies of this resolution to the Governor, the City's state Legislators, and the League of California Cities. PASSED AND ADOPTED this 16th day of June, 2009. ATTEST: Jul! Folcik, City Clerk 0 Allan R. Mansoor, Mayor APPROVED AS TO FORM: Ki berly Hall Barlow, City Attorney STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) I, JULIE FOLCIK, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that the above and foregoing is the original of Resolution No. 09-48 and was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 16th day of June, 2009, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: MANSOOR, LEECE, BEVER, FOLEY, MONAHAN NOES: COUNCIL MEMBERS: NONE ABSENT: COUNCIL MEMBERS: NONE IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 17th day of June, 2009. J IE FOLCIK, CITY CLERK (SEAL)