Res 09-026
RESOLUTION NO. 09-026
A RESOLUTION OF THE CITY COUNCIL OFTHE CITY OF POWAY, CALIFORNIA,
FINDING A SEVERE FISCAL HARDSHIP WILL EXIST IF ADDITIONAL LOCAL
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 1990's the State of California has seized over $8.6
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 fiscal year 2007/08 alone, the State seized $895 million in city
property taxes statewide to fund the State budget after deducting public safety program
payments, and an additional $350 million in local redevelopment funds were seized in
FY 2008-09; and,
WHEREAS, the most significant affect 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 most cities general fund budgets; and,
WHEREAS, in 2004 the voters of California, 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, 2009, the California Department of Finance forwarded a
proposal to the Governor that the State borrow over $2 billion in local property taxes
from cities, counties and special districts to balance the State budget; and,
WHEREAS, the decision to take $2 billion in local property taxes would cause
deep cuts in local public safety and other vital services; and,
WHEREAS, this decision would result in the loss of over $1.2 million in property
tax revenue for the City of Poway; 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. 09-026
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, the City of Poway simply cannot sustain the loss of any more
property tax funds or 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; and,
WHEREAS, refusal by the Legislature to carry-out its constitutional obligation to
compromise on a balanced budget is not a "severe state of fiscal hardship" and would
not justify reductions in critical local services, community revitalization programs and
infrastructure maintenance at a time when cities are struggling to balance their own
budgets during this economic down turn; and,
WHEREAS, city investments in infrastructure, affordable housing, and basic
public safety and other community services will create needed jobs and speed our
economic recovery; and,
WHEREAS, it is fiscally irresponsibility to paper over the State structural deficit
with more borrowing, and Californians deserve State leaders who will tell them honestly
what needs to be done to produce a balanced budget; and,
WHEREAS, it is time for the State of California to cut up its local government
credit cards and deal with the budget deficit in a straightforward way.
NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE
CITY OF POWAY has determined that the City will experience a severe fiscal hardship
if the recommendation of the Department of Finance to borrow $2 billion of local
property taxes is supported by the Governor and the Legislature; and,
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RESOLVED FURTHER, that the City Council strongly and unconditionally
opposes the May 5, 2009 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 strong Iy 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.
PASSED, ADOPTED AND APPROVED by the City Council of the City of Poway,
State of California, at a regular meeting this 19th day of May 2009.
ATTEST:
Resolution No.09-026
Page 4
STATE OF CALIFORNIA )
)SS
COUNTY OF SAN DIEGO )
I, Linda Troyan, City Clerk of the City of Poway, do hereby certify under penalty
of perjury that the foregoing Resolution No. 09-026 was duly adopted by the City
Council at a meeting of said City Council held on the 19th day of May, 2009, and that it
was so adopted by the following vote:
AYES: BOYACK, CUNNINGHAM, REXFORD, HIGGINSON
NOES: NONE
ABSENT: NONE
DISQUALIFIED: NONE
U TrOyan~ City Clerk
City of Poway