Archived News Release from 2003
For Immediate Release
Redwood City Urges Legislature to Reject Governor's Vehicle License Fee "Take Away"
City, CA - January 28, 2003 - At its meeting last night, the
Council of the City of Redwood City joined many other cities in passing
a resolution urging the California legislature to reject the Governor’s
proposed “take away” of Vehicle License Fee (VLF) reimbursements
to local governments. The Governor’s proposed budget includes this
and other massive cuts in local revenues, which will have a long-term
impact on many cities’ ability to provide necessary services to
URGING THE CALIFORNIA LEGISLATURE TO REJECT THE GOVERNOR’S PROPOSED SHIFT OF LOCAL 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 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 vehicle owners. This amount, known as the “offset”, grew in future years to a 67.5 percent offset against the amount owed. The amount paid to local governments in lieu of the reduced VLF payment 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.
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 1998 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 pain. 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
THAT THE COUNCIL OF THE CITY OF REDWOOD CITY HEREBY FINDS:
RESOLVED FURTHER, that the
Council of the City of Redwood City hereby expresses its profound appreciation
to the legislators who support such VLF restoration legislation.
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