Item 17 - Appropriation for Contribution to Cities for Restroring Allocation
AGENDA REPORT SUMMARY
0:
Honorable Mayor and Members of the City Council
James L. Bowersox, City Ma~
John 0, Fitch, Assi stant Ci ty Manager£1r)\-
Penny Riley, Senior Management Analys~
FROM:
INITIATED BY:
DATE:
May 2, 1995
SUBJECI':
Appropriation for Contribution to Cities for Restoring Direct Allocation
of Motor Vehicle Leasing Tax Revenue
ABSTRACT
On March 24, 1995, the City of Poway received a funding request from the Cities for
Restoring Direct Allocation of Motor Vehicle Leasing Tax Revenue, This organization
was formed to change the method by which the state of California allocates sales tax
revenue from leased vehicles, This report recommends a $1,000 donation.
ENVIRONMENTAL REVIEW
Environmental review is not required for this item under California Environmental
Quality Act guidelines,
FISCAL IMPACI'
The fiscal impact of the recommended action is an expenditure from the unappropriated
General Fund of $1,000.
ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE
None,
RECOMMENDATION
It is recommended that $1,000 be appropri ated from the unappropri ated General Fund for
the continuing efforts of the Cities for Restoring Direct Allocation of Motor Vehicle
LeasinG Tax Revenue.
ACTION
.=.\reports\motor,sum
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MAY 2
1995
ITEM 17
CITY OF POW AY
AGENDA REPORT
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TO:
FROM:
INITIATED BY:
Honorable Mayor and Members of the City Council
James L, Bowersox, City Man~
John 0, Fitch, Assistant City Managercr)\-
Penny Riley, Senior Management Analy~
DATE:
SUBJECT:
May 2, 1995
Appropriation for Contribution to Cities for Restoring Direct
Allocation of Motor Vehicle Leasing Tax Revenue
BACKGROUND
On March 24, 1995, the Ci ty of Poway recei ved a fundi ng request from the Citi es
for Restoring Direct Allocation of Motor Vehicle Leasing Tax Revenue. This
organization was formed to change the method by which the State of California
allocates sales tax revenue from leased vehicles, This report recommends a
$1,000 donation,
FINDINGS
Current law provides that when a vehicle is sold to an individual, the sales tax
is based on the full purchase price of the vehicle and the local sales tax is
allocated to the taxing jurisdiction where the automobile dealer is located.
When a vehicle is leased, use tax is imposed on the monthly lease payments, The
local use tax is allocated to the countywide pool in the lessee's county of
resi dence. The countywi de pool i s then allocated to all taxi ng juri sdi ct i ons
within the county based on their proportionate share of total local sales tax
receipts in the prior fiscal year,
About forty percent of total transactions relating to new vehicles are through
leases. Given the large percentage of sales tax base attributable to auto sales
in Poway and the increasing popularity of automobile lease options, the efforts
of Cities for Restoring Direct Allocation of Motor Vehicle Leasing Tax Revenue
may provide a mechanism for increased sales tax revenues for the City of Poway,
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MAY 2
1995
ITEM 17
Agenda Report - Approp~ltion to CRDAMVLTR
May 2, 1995
Page 2
ENVIRONMENTAL REVIEW
Environmental reyiew is not required for this item under California EnYironmental
Quality Act guidelines.
FISCAL IMPACT
The fiscal impact of the recommended action is an expenditure from the
unappropriated General Fund of $1,000.
ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE
None,
RECOMMENDATION
It is recommended that $1,000 be appropriated from the unappropriated General
Fund for the continuing efforts of the Cities for Restoring Direct Allocation of
Motor Vehicle Leasing Tax Revenue.
Attachment A:
Funding Request from Cities for Restoring Direct Allocation of
Motor Vehicle Leasing Tax Revenue.
eb:\c:\reports\motor .par
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MAY 2
1995 ITEM 17
Cities for Restoring
Direct Allocation of
Motor Vehicle Leasing Tax Revenue
City of Noreo
909/735-3900
2870 C1lUt A IleIWe
Norco, CA V1.760
FlU - 909/270-5622
March 24, 1995
.~.
City of PcMay
Jæœs biersax, City Manager
13325 Civic Center Drive
PcMay, CA 92064
Subject: Cities for Restoring Direct Allcx:atial of M:Itar Vehicle :teasing Tax
Revenue
Dear Mr. biersax :
Over the past several m:x¡ths you may have received cx:a.......¡?Cßienœ frail wr
group regarding loss of sales tax revenue frail leased vehicles due to
misallcx:ation to the =ty pool.
We have conducted several organizational ueetings in beth Northem and
Scuthern California to infoDII cities like ycurs of the fi.scal .iIIpIct of this
issue.
IXu"ing this period, a steering cœmittee was facœd to focus DCre intensely
on a mathod to correct this prc:bIEIII. To date we have done the following:
Met on a weekly basis to chart the IOOSt effective effort far wr
su=ess.
Retained advisors in the area of sales tax retentioo. and IlUtCllDtive
leasing to carpose COIX:ise positioo. papers.
Met with legislative aids of several state elected representatives to
measure their suw>rt in carrying a bill.
Created "Place Bolder" bills far intrcductioo. this year, if
legislation becanes necesSaJ:Y (AB B66 & SB 602).
Met with the State Board of Equalizatioo. in SðcraIœnto far gaining
their suw>rt in attarpting to correct the prc:blEIII admi.ni.stratively.
Interviewed lc:.bbyists which may becaœ necesSaJ:Y to retain to work
with the SBJE ar assist in legislatial.
Notwithstanding the ab:Ne, there is a great deal DCre that DUSt be done in
order to achieve su=ess far wr efforts. To begin with, we are requesting
that you actively suw>rt two legislative bills that have been intrcduced in
beth the State Asseubly and Senate. 'lbese bills are AB 866 authored by
AssE!IiDlyman Fred Aguiar and SB 602 authored by Senator Cathie M. Wright.
Both of these bills seek to have DDtor vehicle lease revenue allcx:ated to the
jurisdictions where the lease was negotiated. Letters of suwort sha1ld be
ChairmiJn
Y.u-CIuzimIDn
Trt4.rurer
~C"'ID1]
George T. Lambert
City of Noreo
Danny Roberts
Cit)' of Palmdale
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Rod Gould
City of Monro"ÙJ
John Cuevas
City of Riverside
ATTACHMENT A
MAY 2 1995
I7;:M 1 7
sent to both of these legislators as well as your local assembly
and senate representatives. Assemblyman Aguiar's address is:
State Capitol, Room 4162, Sacramento CA 95814. Senator Wright'š
is State Capitol, Room 4052, Sacramento CA 95814.
In addition to the above, we are requesting your financial
support. Certain cities have already spent a great deal of time
and money in pushing this vital sales tax saving issue to where
it is today.
Our request is for a contribution of $1,000 which should be made
payable to: CRDAMVLTR
(CITIES FOR RESTORING DIRECT ALLOCATION OF MOTOR VEHICLE LEASING
TAX REVENUE)
and sent as soon as possible to:
John Cuevas
City of Riverside
Department of Finance
3900 Main Street
Riverside, CA 92522
The major portion of these funds may go for lobbyists' efforts
and could be in the $40,000 to $50,000 range. Additional items
such as advisory fees, meeting expenses, stationary and postage
will also be necessary. The funds will be held in trust and
disbursed by John Cuevas, Principal Analyst with the City of
Riverside.
Any unused amounts held at the end of our "campaign" will be
returned proportionally to the supporters.
We understand that everyone operates under tight budgets in
these difficult times. That is even more reason why we must
succeed in correcting this loss of general fund revenue through
sales tax leakage and ask for your contribution. The reward will
be well worth the expense and effort.
We thank you in advance for your support.
Sincerely,
GE~~r
CITIES FOR RESTORING DIRECT ALLOCATION OF
MOTOR VEHICLE LEASING TAX REVENUE
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1995
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