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~'~': ~~ ~: ~~,:' y~ COUNTY QF SUTTE, STATE OF C~4~IFORNIA
~•'•._?;~, ~~•.,.....•~ C+'• Resolution No.
RESOLUTION TO ENCOURAGE THE TIMELY
ADOPTION OF A BALANCED BUDGET BY THE STATE
OF CALIFORNIA
03-107
WHEREAS the State of California faces amultiple-year budget deficit of historic
proportions; and
WHEREAS the Constitution of the State of California requires the State Legislature to
adopt a budget on or before June 15 of each year, and for the Governor to sign legislation
enacting the budget on or before July 1 of each fiscal year; and
WHEREAS the June 15 constitutional deadline has passed without the adoption of a
budget bill by the Legislature; and
WHEREAS negotiations on matters of disagreement in the budget bill appear to be at an
impasse in the Legislature; and
WHEREAS prolonged negotiations over balancing the state budget may have serious
repercussions on the State of California and the people of the State of California; and
WHEREAS proposals under consideration for balancing the State budget include a
proposal to make permanent reductions in funding to local government in excess of $1.16 billion,
which said reductions would reduce an estimated $3.4 million general purpose revenues
available to provide public safety programs within the County of Butte; and
WHEREAS the County of Butte opposes multi-year and permanent reductions to local
governments as a solution to the state's budget crisis; and
WHEREAS since 1992 the County of Butte has contributed over $81 million to the
Education Revenue Augmentation Fund (ERAF), and will contribute an estimated $9.5 million
to the ERAF in the coming fiscal year, with said amounts representing a contribution to the State
of California by the people of Butte County; and
WHEREAS the County of Butte's ability to provide valuable public services is
diminished by increased service costs and diminished revenues in addition to lost county
property tax revenues due to the ERAF shifts; and
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WHEREAS the County of Butte is required by California statute to adopt a balanced
budget o n a n a nnual b asis a rid m ust, u rider t he provisions o f C alifornia 1 aw, p rovide f or t hat
budget within the resources available to the County, and cannot balance its budget on the backs
of other jurisdictions or public entities within the State of California; and
WHEREAS the Board of Supervisors has in past years made the very difficult decisions
necessary to balance the County's budget and has done so in a timely manner; and
WHEREAS, the California State Association of Counties, the League of California
Cities, and the California Special Districts Association have adopted principles to reform the
State budgeting process and the relationship between the state and local governments within
California as follows:
I. Balanced Deficit Reduction Approach
• Revenues. Adopt a set of temporary tax increases dedicated solely to retiring the
short-term debt. Keep the VLF covenant made to local governments, by activating
the VLF trigger or continuing the state General Fund revenue backfill.
• Spending Cuts. Reduce the current estimated deficit through state spending
reductions, minimizing federal fund losses where possible. For a balanced
approach, the amount of reductions should be roughly equal to the amount
financed by short-term borrowing.
• Short-term Borrowing. Finance the balance of the budget deficit over a period
of up to 5 years through the issuance of short-term debt instruments, secured by
temporary taxes that are dedicated solely to retiring the short-term debt.
• Multi-Year Spending Limitations. Limit the growth in state spending during the
repayment of the short-term debt. Expenditures would be limited to population
growth, inflation and mandated caseload increases. Prohibit shift of expenditures
to local governments without full compensation. Prop. 98 expenditures would be
calculated outside of the limit. Available funds over the limit would be dedicated
to debt retirement.
II. Fiscal Reform
• Reserve. Require a prudent reserve (2-3%) that could be accessed during
economic shortfalls.
• Local Revenue Protection. In the Constitution, prohibit the legislature from
taking local government revenue or shifting costs to local governments unless (1)
the Governor declares a fiscal emergency, and (2) the legislature approves by a
2/3`d vote, and (3) the amount taken or shifted is fully reimbursed within three
years.
• Commercial Property. Require the reappraisal of commercial/industrial
property every five years.
• Sales/Use Tax on Remote Sales. Improve th
sales/use tax already due from remote sales,
purchases.
e collection of state and local
including Internet and catalog
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III. Long Term Reform/Restructuring
• Increase local government property tax shares to create balanced growth
incentives, stable funding for services, and a nexus between revenue and
responsibility.
• Reform state/local relationship by implementing changes such as: (1) creating a
cabinet level position for Local Government Representation and (2) creating a
separate budget item to detail all state expenditures at the local level.
• Evaluate existing services and service delivery systems to determine optimal level
of government to provide services.
• Require all proposed state legislation to contain an identification of fiscal impacts
and financing sources.
• Reform and strengthen unfunded mandate reimbursement process and prohibit
deferral of mandate payments.
NOW, THEREFORE, BE IT RESOLVED, that the Board of Supervisors of the
County of Butte hereby encourages the State Legislature and Governor of the State of California
to resolve differences in adopting a budget for the 2003/04 fiscal year and to adopt a balanced
budget for the next fiscal year in a timely manner that does not rely upon reductions in revenues
to local government nor shift additional unfunded requirements onto local government, enabling
the Governor to sign the budget bill and subsequent trailer legislation prior to the beginning of
the fiscal year on July 1, 2003.
PASSED AND ADOPTED by the Butte County Board of Supervisors this 24`" day of
June 2003 by the following vote:
AYES: Supervisors Dolan, Houx, Yamaguchi, and Chair Beeler
NOES: None
ABSENT: Supervisor Josiassen
NOT VOTING: None
_~L~~ ~
R. J. BEELER, Chair
Board of Supervisors
ATTEST:
PAUL E. McINTOSH, Chief Administrative Officer and
Clerk of the Board of Supervisors
By: ~ f • ~ ~y~~
Deputy
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