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Home My WebLink AboutAgenda Report - March 17, 2010 D-13AGENDA ITEM t'0145 CITY OF LODI COUNCIL COMMUNICATION Im AGENDA TITLE: Adopt Resolution Opposing AB X8 6/SB X8 6, Fuel Tax Swap MEETING DATE: March 17, 2010 PREPARED BY: City Manager RECOMMENDED ACTION: Adopt resolution opposing AB X8 6/SB X8 6, Fuel Tax Swap. BACKGROUND INFORMATION: The State Legislature is considering two bills that would repeal the sales tax on gasoline and increase the fuel excise tax. The sole purpose is to provide additional revenue to the State's General Fund. Although these bills are intended to be revenue-neutralat worse for local governments, staff and the League of California Cities considers them part of a shell game that underminesthe intent of the voters and, like previous budget maneuvers, will harm local governments in the long run. The fuel tax swap envisioned in these bills is contrary to Proposition42 and Proposition 1A, which reserves the state's share of sales tax on gasoline for capital improvement projects, publictransit and local streets and roads. Eliminating the sales tax on gasoline removes these Constitutional protections the voters intended. The Fuel Tax Swap is the latest in a list of the Legislature's attempts to boost State revenue in a way that eventually harms local governments. Notablefunding changes since 1992 include the Educational Revenue Augmentation Fund, a borrowing of local Vehicle License Fee revenue and the enactment of the "Triple Flip" to swap cities' share of sales tax with property tax. The concern of staff and the League of California cities is the Fuel Tax Swap will have a similar impact on the municipal governments in the future. The adopted resolutionwill be forwarded to Assemblywoman Alyson Huber and Senator Dave Cogdill. FISCAL IMPACT: The Fuel Tax Swap has unforeseen consequences, but will likely have a long-term effect of eroding local revenue. Attachments: Resolution. Blair King City Manager APPROVED: K�'"' —� Bl ' in , City Manager RESOLUTION NO. 2010-31 A RESOLUTION OF THE LODI CITY COUNCIL OPPOSINGAB X8 6/SB X8 6, FUEL TAX SWAP PROPOSALS WHEREAS, the Legislature and the Governor of the State of California are considering adopting legislation that would replace the sales tax on gasoline with an excise tax; and WHEREAS, the voters d the State of California passed Proposition 42 and Proposition 1A of 2006, which reserved the sales tax on gasoline for capital improvement projects, publictransit, and local streets and roads; and WHEREAS, eliminating the sales tax on gasoline undermines the will of the voters; and WHEREAS, similar legislation in the past to replace one source of local government revenue with another source has resulted in the long-term erosion of local government revenue. NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council opposes AB X8 6/SB X8 6, the Fuel Tax Swap proposals. Dated: March 17, 2010 hereby certify that Resolution No. 2010-31 was passed and adopted by the City Council of the City of Lodi in a regular meeting held March 17, 2010, by the following vote: AYES: COUNCIL MEMBERS— Hansen, Hitchcock, Johnson, Mounce, and Mayor Katzakian NOES: COUNCIL MEMBERS — None ABSENT: COUNCIL MEMBERS — None ABSTAIN: COUNCIL MEMBERS— None City Clerk 2010-31 CITY COUNCIL PHIL KATZAKIAN, Mayor SUSAN HITCHCOCK, Mayor Pro Tempore BOBJOHNSON JOANNE MOUNCE LARRY D. HANSEN CITY OF LODI CITY HALL, 221 WEST PINE STREET P.O. BOX 3006 LODI, CALIFORNIA 95241-1910 (209) 333-6702 / FAX (209) 333-6807 www.lodi.gov cityclerk(a)lodi.gov March 19, 2010 Honorable Arnold Schwarzenegger Governor, State of California State Capitol Building Sacramento, CA 95814 Dear Governor Schwarzenegger: BLAIR KING, City Manager RAND[ JOHL, City Clerk D. STEPHEN SCHWABAUER City Attorney I am writing on behalf of the Lodi City Council in opposition of AB 8X 6, SB 8X 6, or any other legislation that results in replacing the sales tax on gasoline with a new excise tax that is not subject to the voter-approvedpropositions 42 and 1 A (2006). Enclosed is a certified copy of a Resolution addressing this issue that was unanimously passed by the Lodi City Council on March 17,20 10. We know you have traditionally been a friend of local government. Because the State has a history of seizing a greater percentage of local government revenue to meet State obligations, we do not believe the gas tax swap will afford the same funding protections to local governments as Proposition 42 or Proposition 1 A. We urge you to veto any legislation that replaces the sales tax on gasoline with a new excise tax. Sincerely, Phil Katzakian Mayor cc: Senator Dave Cogdill Assemblywoman Alyson Huber RESOLUTION NO. 2010-31 A RESOLUTION OF THE LODI CITY COUNCIL OPPOSING AB X8 6/SB X8 6, FUEL TAX SWAP PROPOSALS WHEREAS, the Legislature and the Governor of the State of California are considering adopting legislation that would replace the sales tax on gasoline with an excise tax; and WHEREAS, the voters of the State of California passed Proposition 42 and Proposition 1A of 2006, which reserved the sales tax on gasoline for capital improvement projects, public transit, and local streets and roads; and WHEREAS, eliminating the sales tax on gasoline undermines the will of the voters; and WHEREAS, similar legislation in the past to replace one source of local government revenue with another source has resulted in the long-term erosion of local government revenue. NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council opposes AB X8 6/SB X8 6, the Fuel Tax Swap proposals. Dated: March 17, 2010 hereby certify that Resolution No. 2010-31 was passed and adopted by the City Council of the City of Lodi in a regular meeting held March 17, 2010, by the following vote: AYES: COUNCIL MEMBERS — Hansen, Hitchcock, Johnson, Mounce, and Mayor Katzakian NOES: COUNCIL MEMBERS — None ABSENT: COUNCIL MEMBERS— None ABSTAIN: COUNCIL MEMBERS — None The foregoing document is certified to be a correct qi copy of the original on file in the City Clerk's Office. RANDI JOHL Jennifer M. Robison City Clerk Assistant City Cleric, City of Lodi 2010-31 By. Dated: