Trend in the Region

State v. Localities at California Ballot Box

SAN FRANCISCO — The often contentious relationship between California and its local governments appears to be ­heading back to the electoral battlefield this year.

The state and local agencies are often at odds over money, because they are effectively fighting over pieces of a fixed revenue pie.

Local agencies — through a political committee backed by supporters of city governments, county governments, and redevelopment agencies — launched a signature-gathering campaign this month for a ballot measure they say will preserve their shares of revenue.

They appear to be in a good position to get the measure qualified for the ballot. Valid signatures from 694,354 voters are needed for it to qualify, and the ballot measure’s backers say they plan to collect more than 1.1 million signatures to provide a comfortable margin.

With paid signature gatherers, qualifying a ballot measure is mainly a matter of money, and the campaign appears to have a good start — since October, Californians to Protect Local Taxpayers and Vital Services reported $830,000 in large contributions to the secretary of state, including $450,000 this month, most from a political committee affiliated with the League of California Cities.

Over the last week and a half, the campaign has held a series of kick-off events featuring local leaders in different media ­markets around the state in an effort to build awareness.

“We’re confident that Californians will approve this measure to protect local taxpayer funds and transportation services from continued state raids,” Los Angeles City Council member Janice Hahn said Monday.

Backers of the measure say their goal is to get local government, public safety, and labor leaders to assist a volunteer signature-gathering effort to supplement paid petition gatherers.

“These challenging economic times, and further threats by the state, would make it difficult for us to continue balancing our budget without cuts in services,” San Diego Mayor Jerry Sanders said last week at the event in his city. “We need this ballot measure so we can put a stop to state raids and borrowing of local taxpayer dollars and protect vital local services.”

The organizations representing local governments started laying the groundwork for the ballot measure last year after state lawmakers adopted a series of budget-balancing measures in which the state either shifted or borrowed funds that would ordinarily go to local governments.

Last year’s budget actions included borrowing almost $2 billion from local property tax revenue, as well as permanently shifting to the state $2 billion from redevelopment agencies across California.

Until the last minute of budget negotiations, lawmakers also seriously considered taking $1 billion in gas tax revenue that normally flows to city governments for street maintenance.

Supporters say the proposed ballot measure would:

• Prohibit the state from borrowing local property tax funds, as it did last year.

• Prohibit the state from borrowing or taking gasoline tax revenue dedicated to transportation and transit, including the state sales tax on gasoline, and the highway user tax on gasoline, subject of last year’s proposed $1 billion shift.

• Prevent the taking of locally levied taxes, including parcel taxes, sales taxes, and other locally imposed taxes that are currently dedicated to cities, counties, and special districts.

• Prohibit the state from taking, borrowing or redirecting existing funding for public transit.

• Add new constitutional protections to keep the state out of local ­redevelopment funds.

In many ways, the new ballot measure revisits the state-local battles of 2004, in which local government supporters, through signature gathering, qualified a state ballot measure to protect local revenue. Using that ballot measure as leverage, the local officials negotiated with lawmakers and Gov. Arnold Schwarzenegger to develop a compromise measure, Proposition 1A, which was placed on the ballot.

While Proposition 1A, which passed overwhelmingly, offered protections to local revenue, it gave the state some flexibility, which it exercised last year when it borrowed from local property taxes. Most local governments were made whole through the proceeds of a three-year bond issue that was sold in November, a mechanism that was made possible though Proposition 1A.

The new ballot measure would remove most of the flexibility that was built into Proposition 1A, and add protection for transit agencies and redevelopment.

It is likely to enter a crowded and possibly confusing marketplace for budget reform ideas. The statewide ballot in November is likely to include a separate package of reforms backed by the ­middle-of-the-road California Forward organization.

One of California Forward’s two ballot measures also incorporates provisions to prohibit the state government from borrowing or taking taxes, assessments, or fees levied by local agencies.

Voters may also be distracted by a separate effort — which also has a good chance of qualifying for the ballot — that would convene a state constitutional convention.

In addition to the various government reform efforts that are likely to be on the ballot, voters will also have to sort through elections for governor and six other state constitutional officers, as well as the publicity haze generated by another measure likely to qualify that would decriminalize most marijuana use.

Meanwhile, Schwarzenegger in his most recent budget proposal appears to be trying a flank assault on the transit and transportation funding sources that the “Protect Local Taxpayers” measure seeks to protect.

After losing a court case over previous budget shifts involving the state sales tax on gasoline, the governor last week proposed eliminating the tax altogether and replacing it with a separate and distinct excise tax.

By eliminating the revenue stream, ending the sales tax on fuel would render irrelevant any existing and proposed state constitutional limits on how that tax revenue can be used.

“This is just the kind of Byzantine proposal that we’ve seen from the state over and over again in recent years that erodes voter confidence in state government,” League of California Cities executive director Chris McKenzie said in a statement after the budget proposal was released.



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