Efforts to restore new cities' funding under way in Capitol
By JIM MILLER, Riverside Press Enterprise
Sacramento Bureau
Staff writers Jeff Horseman and Duane W. Gang contributed to this story. 10:34 PM PDT on Thursday, July 7, 2011
SACRAMENTO - Riverside County's newest cities are ramping up efforts to reverse a potentially bankrupting hit to their general funds, but there were no signs this week of an imminent breakthrough.
Last week's budget legislation diverted $153 million in vehicle-license fee revenue to maintain a local law-enforcement grant program. The program had relied on a temporary license-fee increase that expired Friday.
The $86 billion general fund budget costs all cities and counties. But it lands particularly hard on cities incorporated after 2004, all of which are in Riverside County: Jurupa Valley, Eastvale, Wildomar and Menifee.
Current law entitles the cities to extra license-fee money to help them get established. Starting Aug. 1, however, the cities will begin to lose more than $14 million, costing them up to half of their general fund revenue. Officials have said the loss will force layoffs, insolvency or even disincorporation.
Assemblyman Paul Cook, who represents Menifee, said the Legislature needs to fix the situation.
"When you change rules of the game and this money is not there, it could kill the cities," said Cook, R-Yucca Valley.
Other agencies also are trying to restore license-fee money. Orange County stands to lose $48 million in license fee revenue that the county has used to pay off loans following the county's bankruptcy in 1995,
A bipartisan group of Orange County lawmakers introduced legislation Friday to restore the county's share of the license-fee money.
Assemblyman Jose Solorio, the author of the Orange County bill, said he would consider including the Riverside County cities in his measure.
"I am obviously focused on helping Orange County, but if there is a window of opportunity to help other communities, I'm willing to do that," said Solorio, D-Santa Ana.
PARTISANSHIP
Post-budget bad blood complicates any fix, however.
Legislative Democrats pushed through last week's budget legislation on majority votes after failing to get Republican support for extending some temporary taxes included in a 2009 budget deal. Democrats derided Republicans as the "party of no."
Many Republicans criticized the budget package and took credit for blocking the tax extensions.
When the GOP lawmakers who represent the four cities warned the governor of the license-fee shift's "devastating effect," Brown spokesman Gil Duran was unsympathetic. "The people of western Riverside County can thank this particular group of legislators for their predicament," he said last week.
Brown denied that any cuts were targeted at GOP areas. Other officials have concluded that the disproportionate hit to the four cities was an oversight as budget aides hurriedly crafted legislation for last Tuesday's vote.
"They had no clue it was going to impact these four cities," Riverside County Supervisor John Tavaglione said. Now that the issue has come to light, he said, any Capitol partisan politics will play a role in any remedy.
The cities seem to be covering their partisan bases.
While working with their GOP legislators, three of the four cities have hired lobbying firm Joe A. Gonzalves and Son. Gonzalves was a longtime Democratic lawmaker from Los Angeles County and the firm has strong connections on both sides of the aisle.
In 2006, the Gonzalves firm helped pro-cityhood groups in Wildomar and Menifee pass legislation to ensure adequate funding for the would-be cities. Then-Assemblyman John Laird, a Santa Cruz Democrat, carried the bill. Laird is now Brown's resources secretary.
There are other obstacles to unwinding the legislation.
The budget reserve, a possible source of money for the cities, is only $500 million. More cuts loom in January if the state falls short of revenue estimates.
Also, law-enforcement leaders are likely to oppose anything that would reduce funding for the public-safety grant program known as Citizens Options for Public Safety. At the same time, some officials have raised concerns that the license-fee shifts take revenue away from other local public-safety programs.
The League of California Cities is one of several groups weighing a lawsuit over the budget. The Wildomar City Council met behind closed doors to discuss a possible lawsuit over the lost license-fee revenue.
Tavaglione, meanwhile, wants the county to examine how it could help the cities. The Board of Supervisors is scheduled to discuss the matter Tuesday.
Steps could include modifying "revenue neutrality" agreements that require the cities to compensate the county for the loss of sales tax and property tax revenue when they incorporated.
"The last thing we want to do is see these cities fail," said Tavaglione, who represents Eastvale and Jurupa Valley.
SACRAMENTO - Riverside County's newest cities are ramping up efforts to reverse a potentially bankrupting hit to their general funds, but there were no signs this week of an imminent breakthrough.
Last week's budget legislation diverted $153 million in vehicle-license fee revenue to maintain a local law-enforcement grant program. The program had relied on a temporary license-fee increase that expired Friday.
The $86 billion general fund budget costs all cities and counties. But it lands particularly hard on cities incorporated after 2004, all of which are in Riverside County: Jurupa Valley, Eastvale, Wildomar and Menifee.
Current law entitles the cities to extra license-fee money to help them get established. Starting Aug. 1, however, the cities will begin to lose more than $14 million, costing them up to half of their general fund revenue. Officials have said the loss will force layoffs, insolvency or even disincorporation.
Assemblyman Paul Cook, who represents Menifee, said the Legislature needs to fix the situation.
"When you change rules of the game and this money is not there, it could kill the cities," said Cook, R-Yucca Valley.
Other agencies also are trying to restore license-fee money. Orange County stands to lose $48 million in license fee revenue that the county has used to pay off loans following the county's bankruptcy in 1995,
A bipartisan group of Orange County lawmakers introduced legislation Friday to restore the county's share of the license-fee money.
Assemblyman Jose Solorio, the author of the Orange County bill, said he would consider including the Riverside County cities in his measure.
"I am obviously focused on helping Orange County, but if there is a window of opportunity to help other communities, I'm willing to do that," said Solorio, D-Santa Ana.
PARTISANSHIP
Post-budget bad blood complicates any fix, however.
Legislative Democrats pushed through last week's budget legislation on majority votes after failing to get Republican support for extending some temporary taxes included in a 2009 budget deal. Democrats derided Republicans as the "party of no."
Many Republicans criticized the budget package and took credit for blocking the tax extensions.
When the GOP lawmakers who represent the four cities warned the governor of the license-fee shift's "devastating effect," Brown spokesman Gil Duran was unsympathetic. "The people of western Riverside County can thank this particular group of legislators for their predicament," he said last week.
Brown denied that any cuts were targeted at GOP areas. Other officials have concluded that the disproportionate hit to the four cities was an oversight as budget aides hurriedly crafted legislation for last Tuesday's vote.
"They had no clue it was going to impact these four cities," Riverside County Supervisor John Tavaglione said. Now that the issue has come to light, he said, any Capitol partisan politics will play a role in any remedy.
The cities seem to be covering their partisan bases.
While working with their GOP legislators, three of the four cities have hired lobbying firm Joe A. Gonzalves and Son. Gonzalves was a longtime Democratic lawmaker from Los Angeles County and the firm has strong connections on both sides of the aisle.
In 2006, the Gonzalves firm helped pro-cityhood groups in Wildomar and Menifee pass legislation to ensure adequate funding for the would-be cities. Then-Assemblyman John Laird, a Santa Cruz Democrat, carried the bill. Laird is now Brown's resources secretary.
There are other obstacles to unwinding the legislation.
The budget reserve, a possible source of money for the cities, is only $500 million. More cuts loom in January if the state falls short of revenue estimates.
Also, law-enforcement leaders are likely to oppose anything that would reduce funding for the public-safety grant program known as Citizens Options for Public Safety. At the same time, some officials have raised concerns that the license-fee shifts take revenue away from other local public-safety programs.
The League of California Cities is one of several groups weighing a lawsuit over the budget. The Wildomar City Council met behind closed doors to discuss a possible lawsuit over the lost license-fee revenue.
Tavaglione, meanwhile, wants the county to examine how it could help the cities. The Board of Supervisors is scheduled to discuss the matter Tuesday.
Steps could include modifying "revenue neutrality" agreements that require the cities to compensate the county for the loss of sales tax and property tax revenue when they incorporated.
"The last thing we want to do is see these cities fail," said Tavaglione, who represents Eastvale and Jurupa Valley.
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