Item 6 - Status of Pending Legislation
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- DISTRIBUTED 6 ;.c-/(}-fj
rtGENDA REPORT - \"i OF PO~,
C. <ir
CITY OF POW A Y
This report is included on the Consent Calendar. There will be no separate discussion of the report prior to approval by the
City Council unless members of the Council, staff or public request it to be removed fr?~ t~e ~onsent Calendar and
discussed separately. If you wish to have this report pulled for discus~ion, pl.ease fill out a slip IndICating the report number
and give it to the City Clerk prior to the beginning of the City Council meeting.
TO:
FROM:
Honorable Mayor and MemberS~e_ City
James L. Bowersox, City Mana<:j--
Janis Acosta, Management Assistan~
June 11, 1991
Council
INITIATED BY:
DATE:
SUBJECT:
status of Pending Legislation
ABSTRACT
In an attempt to balance the State budget for fiscal year 1991 _
1992, the State BUdget Conference Committee has recently adopted
a budget proposal containing revenue cuts that would
significantly impact local governments. It is being recommended
that the City Council receive and file this report.
BACKGROUND
Under the provisions of SB 88, a State Budget Conference
Committee has been established to address the state budget's
deficit through the preparation of a proposed State budget
package for fiscal year 1991 - 1992. For the past several
months, the State Budget Conference Committee, comprised of
representatives from both houses of the Legislature, has been
meeting daily to negotiate and devise a proposed State budget.
FINDINGS
On Saturday, June 1, 1991, the State Budget Conference Committee
adopted a budget proposal for fiscal year 1991 - 1992. The
Conference Committee's budget proposal is aimed at eliminating
the state of California's $14.3 billion deficit. Instead of
restructuring state and local government finances so that
revenues are matched with responsibilities, the state Budget
Conference Committee has proposed a budget which uses city funds
to balance the state budget. The Conference Committee's budget
package includes the following items that would impact cities.
ACTION:
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JVIY . i ;(1<:') l t{;,i~l ~ f,
Pending Legislation
June 11, 1991
Page 2
1. continuation of SB 2557 booking and property tax
administration fees.
2. A cut in Redevelopment Agency supplemental Subventions.
3. A 7 percent shift in Vehicle License Fee revenues to
help fund trial courts.
4. A 50 percent shift of fines and forfeiture revenues
that excludes parking fines.
5. The use of state and local sales taxes for sporting
events and concerts admissions.
6. Repeal of sales tax exemptions on items such as candy,
snack food, newspapers, bunker fuel, commercial
aircraft fuel, bottled water, and leases.
The League of California cities has estimated that the proposed
shifts in city revenue would divert $257 million from cities to
the state while the use and repeal of sales tax exemptions would
create approximately $100 million in sales tax revenue for cities
on a statewide basis.
The Conference Committee's proposed budget is currently being
reviewed by the Governor and Legislature for consideration and
further negotiation. The local Assembly and Senate delegation
have been informed about how the Conference Committee's proposed
revenue cuts would impact the City of Poway.
FISCAL IMPACT
The continuation of SB 2557 booking and property tax
administration fees would continue to cost the City approximately
$313,000 annually. A 7 percent shift in the City's Vehicle
License Fee revenue would result in approximately a $120,000
revenue reduction and a 50 percent shift in the city's fines and
forfeiture revenue would decrease revenue by $50,000. The
application of sales tax for sporting events and concert
admissions would generate approximately $7,850 in sales tax
revenue. Consequently, staff has projected that the proposed
state Budget Conference Committee budget would decrease General
Fund revenues for fiscal year 1991 - 1992 by $170,000.
RECOMMENDATION
It is recommended that the City Council receive and file this
report.
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JUN 111991 ITtl'll 16