HomeMy WebLinkAbout005-03RESOLUTION NO. 5-2003
URGING THE CALIFORNIA LEGISLATURE TO REJECT THE GOVERNOR'S
PROPOSED SHIFT OF LOCAL VEHICLE LICENSE FEE (VLF) REVENUES AND TO
HONOR THE 1998 COMMITMENT TO RESTORE THE VLF
WHEREAS, prior to 1935, cities and counties collected property taxes on motor vehicles to
fund essential local public health and safety services; and
WHEREAS, in 1935, the Legislature first enacted the Vehicle License Fee (VLF) Act,
replacing the property tax on vehicles with a 1.75 percent fee charged against the value of
the motor vehicle; and
WHEREAS, in 1948, the rate of the VLF was increased to 2 percent of the value of the
vehicle; and
WHEREAS, in 1986, the voters voted overwhelmingly to constitutionally dedicate the
proceeds of the VLF to fund city and county services; and
WHEREAS, in 1998, a period of strong economic growth, the Legislature approved the use
of a portion of the rapidly growing state General Fund to reduce the VLF payments of
vehicles owners. This amount, known as the "offset," grew in future years to 67.5 percent
offset against the amount owed. The amount paid to local governments in lieu of the
reduced VLF payments is known as the "VLF backfill"; and
WHEREAS, the 1998 legislation and subsequent enactments contain clear provisions that
when insufficient funds are available to be transferred from the General fund to fully fund
the offsets and backfill amount, that the VLF offset shall be reduced and VLF payments
increased; and
WHEREAS, VLF and backfill revenues constitute 15 to 25 percent of typical city and
county general-purpose revenues. On average, more than 60 percent of city general fund
spending and more than half of county general funds go to front line law enforcement, fire,
emergency medical services, and health care programs; and
WHEREAS, revenues derived from the VLF and backfill are of critical importance in
funding vital local public health and safety services; and
WHEREAS, any failure by the Legislature to maintain the VLF backfill or restore the VLF
will cause widespread disruption in local government services essential to the well-being of
California citizens and their cities and counties; and
WHEREAS, Governor Davis' proposal to divert $4 billion in local VLF backfill payments
over the next 17 months fails to honor the 1997 commitment and is a direct assault on local
services that will be felt by every California resident; and
WHEREAS, shifting $4.2 billion in locally controlled revenues for local services is neither
equitable nor fair. No state program or department has been asked to shoulder such a
disproportionate share of the budget paid. These cuts come on top of the nearly $5 billion
each year that is transferred from local services to fund state obligations; now, therefore
be it
RESOLVED, by the Danville Town Council that if the state General Fund can no longer
afford the expense of part or all of the VLF "backfill," that the Legislature and Governor of
California are hereby respectfully urged to implement the provisions of current law
providing for the reduction of the VLF offset in bad economic times and to unconditionally
restore the VLF in an amount necessary to reduce the VLF backfill; and be if further
RESOLVED, that the Danville Town Council hereby expresses its profound appreciation to
the legislators who support such VLF restoration legislation.
APPROVED by the Danville Town Council at a special meeting on January 21, 2003, by the
following vote:
AYES:
NOES: None
ABSTAINED: None
ABSENT: None
Shimansky, Arnerich, Doyle, Greenberg, Stepper
MAYOR
APPROVED AS TO FORM:
CITY ATTORNEY
AT'I'EST:
CITY CLERK
PAGE 2 OF RESOLUTION NO. 5-2003