Vehicle License Fees

AB 1191 (Huber) – Support
As Amended on January 23, 2012

AB 1191, by Assembly Member Alyson Huber, would provide counties and their cities a process to seek reimbursement for revenues lost as a result of the triple-flip and the VLF swap. CSAC and the Regional Council of Rural Counties are jointly sponsoring the bill.

Several years ago, the state shifted a portion of the local sales and use tax away from counties and cities to pay off some of the state’s debt, the Economic Recovery bonds; this diversion will end when these bonds are fully paid. Around the same time, the state also decided to reduce a tax whose proceeds went entirely to counties and cities, the Vehicle License Fee.

To reimburse counties and cities for these reductions to their taxes, the state directed county auditor-controllers to reallocate a portion of K-14 property taxes to counties and cities. Due to Proposition 98, the schools are made whole by the state General Fund. Thus, the end result of these accounting maneuvers is that the state pays its debt with its own money and locals don’t suffer tax revenue losses because the state reduced the rate.

However, basic aid schools don’t receive state General Fund money, so to avoid cutting schools the deal stipulated that county auditor-controllers may not allocate property taxes away from these basic aid schools for these purposes. No one foresaw at the time that any county would one day contain only basic aid schools. But that has now occurred.

Amador County finds itself in the unfortunate situation of having no source to reimburse itself for the taxes the state redirected and reduced.

AB 1191 outlines a process by which county auditors could present information to the State Controller that identifies the amount of reimbursement owed to each local agency pursuant to the deals the state made with locals. Once those amounts are appropriated by the Legislature, the Controller then transfers the owed funds to the county auditor for distribution to the affected county and cities.

This is money that the state has already been counting on spending, but instead of reimbursing counties and cities indirectly through Proposition 98, it would be reimbursing locals directly in the same amount.

The Senate Governance and Finance Committee passed AB 1191 unanimously at its meeting on Wednesday, June 13. It now moves to the Senate Appropriations Committee.

Local Revenue

SB 954 (Liu) – Support
As Amended on March 1, 2012

SB 954, by Senator Carol Liu, would authorize the State Controller to, at the request of a county or city, offset any payments due to people from the unclaimed property held by the state in order to pay debts those people owe the county or city.

This authority already exists for offsetting tax refunds and lottery winnings. The bill would provide an appeal process for people who believe the billing was in error, ensuring the process is fair to all parties. All current protections for those billed would be retained from the current process.

SB 954 extends a proven, efficient system for recovery of money due to local agencies, and in doing so will ensure millions of dollars owed to counties and cities are paid.

The Assembly Local Government Committee passed SB 954 unanimously at its hearing on Wednesday, June 13. The bill now moves to Assembly Appropriations Committee.

County Budgets

AB 1253 (Davis) – Support
As Amended on January 4, 2012

AB 1253, by Assembly Member Mike Davis, would allow Boards of Supervisors to amend recommended budgets (due by June 30 each year) before adopting a final budget (due by October 2 each year). A revision of the 2009 Budget Act inadvertently deleted the ability to do so.

The Senate Governance and Finance Committee passed AB 1253 from its consent calendar on Wednesday, June 13. It now moves to the Senate Consent Calendar.