On January 1, 2017, the statewide sales tax rate dropped a
quarter of a percent, back to its original rate before voters
approved Proposition 30, The Schools and Local Public Safety
Protection Act of 2012. Prop. 30 provided for an increase in
both the personal income tax and statewide sales tax rate to
bring more money to education and healthcare programs. In light
of its expiration, the statewide sales tax rate has lowered from
7.5 percent back to its previous level of 7.25 percent.
County supervisors and auditor-controllers have two new
opportunities to serve on committees established under the State
Controller’s Office (SCO) that help improve budgeting and tax
regulations on behalf of local government.
First, there is an opening for a county supervisor on the
Committee
on County Tax Collecting Procedures, which meets quarterly by
teleconference or in person and advises the SCO on policy
development and tax levying matters.
California Debt and Investment Advisory Commission released
guidance documentation to help local government agencies
comply with a new law related to debt issuance reporting,
established by Senate Bill 1029 (Hertzberg, 2016). As of January
1, 2017, local agencies must certify that before they issue debt
that they have adopted local debt policies concerning the use of
debt and that the proposed debt issuance is consistent with those
policies before seeking to issue new debt.
In an overall effort to strengthen the long-term sustainability
of what is the largest public employees retirement system in the
country, the CalPERS Board of Administration approved a
recommendation to gradually lower the “discount rate” during its
December 21 meeting. Counties will recall that the discount
rate is the percentage of expected returns on investments
made by CalPERS. A lower discount rate means that employers,
including counties, will be contributing more to the
retirement fund over the next three years.
CSAC has long fought against mandatory employer-provided
orientation as it has serious legal, logistical, and
administrative implications for counties. Despite opposition from
numerous local government and education management stakeholders,
the idea of mandatory orientation continues to be recycled by the
Legislature year after year.
The Finance and Administration Committee of the California Public
Employee’s Retirement System (CalPERS) will be hosting a workshop
on the discount rate during its open session meeting next
Tuesday, December 20. The workshop will build upon previous
discussions about securing CalPERS’ future – managing funding
risk, stakeholder outreach and engagement. This includes the
impact to the funded status, normal costs, and unfunded accrued
liabilities if the Board of Administration (Board) elects to
lower the assumed rate of return.
The CSAC Government Finance and Administration Policy Committee,
which includes the Finance and Operations Policy Unit, met on
December 1 at the 122nd CSAC Annual meeting with Supervisor
Hannigan, Solano County, presiding as Chair. The Government Finance and
Administration meeting agenda is available online.
State Treasurer John Chiang announced a new Cannabis Banking
Working Group to develop solutions on how to implement
Proposition 64 (Adult Use of Marijuana Act) and address the
conflict between state and federal law. This includes the
cannabis industry’s ability to effectively participate in the
state and nation’s banking system for what is traditionally a
cash-heavy industry.
