News

Cities prepare for court fight over state’s shift of local funds

The League of California Cities says it will go to court to block the proposed $1.7 billion tax on locals' revenue and the $350 million tax on city redevelopment if the proposals ultimately get approved in the Capitol to help balance the state's budget.

The $1.7 billion dollar tax targets cities' revenue from local gas taxes, which are a key component in funds for California cities. The move comes as the board, along with 150 city officials, voted unanimously to challenge the new tax. The League's executive

director, Chris Mckenzie, called the tax "illegal" and a "job killer" that undermines "investor confidence in short-term California bond notes."

"The proposed taxes will not generate any of the promised revenue in the budget," president of the League Judith Mitchell, "We are Californians, we want our state government to work again. That begins with adopting and honest state budget… that doesn't kick the can down the road."

Modesto Mayor Jim Ridenour said that if the proposed taxes were to pass, Modesto would be forced to, "maintain only half of the cities streets… and shut down 12,000 street lights… and with the redevelopment taxes, restrict the city's ability to fund low and moderate income housing." He went on to call the taxes, "unconstitutional gimmicks that would steal cities' tax and redevelopment funds." Clovis city-council member Nathan Magsig said that, "Many public-works projects [would] grind to a screeching halt… [and] become public safety issues."

The local officials held a news briefing at the Convention Center to declare their opposition to the state budget proposals.In a letter to the Budget Conference Committee, groups including the California State Council of Laborers and the California Transit Association, as well as Sacramento Mayor Kevin Johnson, targeted the proposed tax increases.

The League says the taxes are unconstitutional, and noted that a Sacramento Superior Court judge on April 30 ruled that the borrowing of local redevelopment funds by the state was unconstitutional.

Mckenzie said there were "very limited provisions in place" for the state to borrow local revenues from gas taxes, but added that the state has not invoked any of the provisions.


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