CC Resolution 2009-044RESOLUTION NO. 2009 - 044
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
LA QUINTA, CALIFORNIA FINDING A SEVERE FISCAL
HARDSHIP WILL EXIST IF ADDITIONAL CITY PROPERTY
TAX FUNDS ARE SEIZED AND ADDITIONAL UNFUNDED
MANDATES ARE ADOPTED BY THE STATE OF
CALIFORNIA
WHEREAS, the current economic crisis has placed cities under incredible
financial pressure and caused city officials to reopen already adopted budgets to
make painful cuts, including layoffs and furloughs of city workers, decreasing
maintenance and operations of public facilities, and reductions in direct services to
keep spending in line with declining revenues; and
WHEREAS, since the early 1990s the state government of California has
seized over 58.6 billion of city property tax revenues statewide to fund the state
budget even after deducting public safety program payments to cities by the state;
and
WHEREAS, in FY 2007-08 alone the state seized 5895 million in city
property taxes statewide to fund the state budget after deducting public safety
program payments and an additional 5350 million in local redevelopment funds
were seized in FY 2008-09; and
WHEREAS, the most significant impact of taking local property taxes has
been to reduce the quality of public safety services cities can provide since public
safety comprises the largest part of any city's general fund budget; and
WHEREAS, in 2004 the voters by an 84% vote margin adopted substantial
constitutional protections for local revenues, but the legislature can still "borrow"
local property taxes to fund the state budget; and
WHEREAS, on May 5 the Department of Finance announced it had proposed
to the Governor that the state "borrow" over S2 billion in local property taxes from
cities, counties and special districts to balance the state budget, causing deeper
cuts in local public safety and other vital services; and
WHEREAS, in the past the Governor has called such "borrowing" proposals
fiscally irresponsible because the state will find it virtually impossible to repay and
it would only deepen the state's structural deficit, preventing the state from
balancing its budget; and
Resolution No. 2009-044
Fiscal Hardship
Adopted: May 19, 2009
Page 2
WHEREAS, the Legislature is currently considering hundreds of bills, many of
which would impose new costs on local governments that can neither be afforded
nor sustained in this economic climate; and
WHEREAS, state agencies are imposing, or considering, many regulations
imposing unfunded mandates on local governments without regard to how local
agencies will be able comply with these mandates while meeting their other
responsibilities; and
WHEREAS, the combined effects of the seizure of the City's property taxes,
increasing unfunded state mandates, and the revenue losses due to the economic
downturn have placed the City's budget under serious fiscal pressure; and
WHEREAS, our City simply can not sustain the loss of any more property
tax funds or to be saddled with any more state mandates as they will only deepen
the financial challenge facing our City; and
WHEREAS, a number of the City's financial commitments arise from
contracts, including long term capital leases and debt obligations which support
securities in the public capital markets, that the City must honor in full unless
modified by mutual agreement of the parties.
NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE
CITY OF LA QUINTA has determined that the City will experience a severe fiscal
hardship if the recommendation of the Department of Finance to "borrow" S2
billion of local property taxes is supported by the Governor and the Legislature; and
RESOLVED FURTHER, that the City Council strongly and unconditionally
opposes the May 5 proposal of the Department of Finance and any other state
government proposals to borrow or seize any additional local funds, including the
property tax, redevelopment tax increment, and the City's share of the Prop. 42
transportation sales tax; and
RESOLVED FURTHER, that the City Council strongly urges the state
legislature and Governor to suspend the enactment of any new mandates on local
governments until such time as the economy has recovered and urges the state to
provide complete funding for all existing and any new mandates.
RESOLVED FURTHER, that the City Clerk shall send copies of this resolution
to the Governor, our state senator(s), our state assembly member(s) and the
League of California Cities.
Resolution No. 2009-044
Fiscal Hardship
Adopted: May 19, 2009
Page 3
PASSED, APPROVED, and ADOPTED at a regular meeting of the La Quinta
City Council held on this 19`" day of May, 2009, by the following vote:
AYES: Council Members Franklin, Henderson, Kirk, Sniff, Mayor Adolph
NOES: None
ABSENT: None
ABSTAIN: None
DON ADOL H, M or
City of La Quinta, California
ATTEST:
VERONICA J:~NTECINO, CMC, City Clerk
City of La Qu ta, California
(SEAL) .- -
APPROVED AS TO FORM:
M. KATI• RINE J ON, City Attorney
City of La Quinta, California