Gov Gray Davis Says He'll Veto Legislature-Passed Vehicle License Fee Hike, Says "There Will Still Be Resources, As Always, To Finance Local Services Incl. Police & Fire"
Statement by CA Gov. Gray Davis re VLF increase legislation
Assembly Budget Committee Chair Oropeza calls Governor's veto threat "a disappointment."
(February 5, 2003) -- CA Governor Gray Davis has announced he will veto a bill, passed by the CA Assembly and CA Senate, that (as previously reported by LBReport.com would nearly triple CA's annual vehicle license fee.
In a written statement from Sacramento (posted verbatim by LBReport.com below), Gov. Davis said "vetoing this measure will not deny local government of one penny for the balance of the current year. There will still be resources, as always, to finance local services including police and fire."
In response, Assemblymember Jenny Oropeza (D, Carson-LB), Chair of the Assembly Budget Committee, released a statement that called the Governor's veto threat "a disappointment" (details below).
In 1998, the CA legislature lowered drivers' VLF cost by using CA's then-surplus to continue sending city halls the difference (a "backfill"). With CA's surplus now a deficit (state spending exceeding state revenue), CA Gov. Gray Davis has proposed ending the "backfill" to help cover the red ink.
This alarmed LB City Hall, since the backfill currently provides millions for LB's General Fund (for items ranging from police and fire to perks and pensions)...and LB's City Council is already spending more than it's taking in even with the backfill.
On January 21, the City Council unanimously passed a resolution (verbatim text below) saying in effect that if the state could no longer reduce the VLF cost for drivers (because of the state deficit), drivers should pay the full 2% VLF paid before 1998 to continue providing the backfill for City Hall. LB Councilmembers Dan Baker, Laura Richardson and LB Mayor Beverly O'Neill travelled to Sacramento to urge state lawmakers to do this. On January 28, the CA Assembly passed and sent to the CA Senate a bill that would effectively raise the VLF paid by drivers.
Governor Davis' announcement that he'll veto the legislation means it will not become law...and the Davis administration contends cutting off the backfill money (now being sent to LB City Hall and other city halls) would require the legislature to pass a bill to do so. (The legislature has not done so.)
LBReport.com posts Gov. Davis' veto intention statement, below, followed by the statement of Assembly Budget Committee Chair Jenny Oropeza, as well as the recorded votes of CA Assemblymembers on raising the VLF (which won't happen with the Governor's intended veto.)
We also include the LB City Council's resolution on the VLF issue. Although increasing the annual the VLF paid by CA drivers was opposed by CA Republican lawmakers, LB Vice Mayor Frank Colonna and 8th district Councilman Rob Webb -- both Republicans -- supported the Jan. 21 Council resolution that encouraged the state legislature to do so.
"I want to begin by expressing my gratitude to the legislature for dealing with some very tough decisions. Making reductions is a painful process. People do not come to Sacramento to do that. I know how tough this process is because I presented a budget myself in January. It was balanced. It was responsible. It made tough decisions.
"I cannot support the bill that the legislature is sending me for a number of reasons. First of all, it falls short of what is necessary to address the budget solution. Secondly, the centerpiece of my plan is an $8 billion realignment proposal. I believe addressing the vehicle license fee increase out of context of a total budget solution is unwise.
"It will leave the legislature with two daunting choices. One, cut $8 billion more than I proposed in my January budget or two, raise taxes by $13 billion. In other words, the legislature would have to make deeper cuts into education, health care, state and local government and social services beyond what I proposed in my budget or dramatically increase taxes, which will almost certainly slow the economy's efforts to recover.
"I want to make two points, vetoing this measure will not deny local government of one penny for the balance of the current year. There will still be resources, as always, to finance local services including police and fire. Two, the ultimate task before us is to pass a balanced, timely and responsible budget that can command votes from both Democrats and Republicans. Passing a budget requires at least the participation of six Assembly Republicans and two Senate Republicans. In short we have a bipartisan task before us we need to approach it in a bipartisan manner starting today, not the day before we need the votes.
"So I will veto the measure that the legislature is sending me and ask them, difficult though I know it is, to go back to the drawing board and send me a package of cuts as soon as humanly possible."
Responsive Statement by Assemblymember Jenny Oropeza, Chair Assembly Budget Committee
"Democrats from both houses have sent the Governor a reasonable and responsible $12.8 billion package that provides a solid down payment toward resolving our budget deficit."
"Simply put, our plan is balanced and fair. It protects vital public services that Californians care most about - our schools, our police and our firefighters."
"These are real cuts to vital programs, but we will not balance this budget through cuts alone. A balanced approach of cuts and additional revenue is, I believe, a better way."
"Democrats will not ask for sacrifices from those who can least afford them without asking more of those who can.
The Governor's veto threat is a disappointment."
CA Assembly & CA Senate votes on passage to raise VLF
As previously reported by LBReport.com, the Howard Jarvis Taxpayers Association had blasted the legislation an end-run around Prop. 13's requirement for a 2/3 vote in both the Assembly and Senate to raise taxes...and vowed a court fight to challenge the increase in what it calls the "car tax." The Jarvis group called the VLF "a very regressive tax falling disproportionately on working class California families."
VOTES - ROLL CALL
MEASURE: ABX1 4
TOPIC: Vehicle license fees.
LOCATION: ASM. FLOOR
MOTION: AB4 Wesson Assembly Third Reading First Extraordinary Session
(AYES 45. NOES 34.) (PASS)
Berg, Bermudez, Calderon, Canciamilla, Chan, Chavez, Chu, Cohn, Corbett, Diaz, Dutra, Dymally, Firebaugh, Frommer, Goldberg, Hancock, Jerome Horton, Jackson, Kehoe, Koretz, Laird Leno, Levine, Lieber, Liu, Longville, Lowenthal, Montanez. Mullin, Nakano, Nation, Negrete McLeod, Nunez, Oropeza, Pavley, Reyes, Ridley-Thomas, Salinas, Simitian, Steinberg, Vargas, Wiggins, Wolk, Yee, Wesson
Aghazarian, Bates, Benoit, Bogh, Cogdill, Correa, Cox, Daucher, Dutton, Garcia, Harman, Haynes, Shirley Horton, Houston, Keene, La Malfa, La Suer, Leslie, Maddox, Maldonado, Matthews, Maze, McCarthy, Mountjoy, Nakanishi, Pacheco, Parra, Plescia, Richman, Runner, Samuelian, Spitzer. Strickland, Wyland
ABSENT, ABSTAINING, OR NOT VOTING
Jan. 21, 2003 LB City Council resolution re VLF
WHEREAS, the VLF backfill accounts for $27 million in the general fund, which equates to approximately 10% of our general fund budget, with roughly two-thirds of that funding committed to support essential public safety services for our residents; and
WHEREAS, revenues derived from the VLF and backfill are of critical importance in funding vital local public health and safety services; and
WHEREAS, any failure by the Legislature to maintain the VLF backfill or
restore the VLF to pre-rebate levels will cause widespread disruption in local
government services essential to the well-being of California citizens and their cities
and counties; and
WHEREAS, Governor Davis' proposal to divert $4 billion in local VLF backfill payments over the next 17 months fails to honor the 1998 commitment and is a direct assault on local services that will be felt by every California resident; and
WHEREAS, Long Beach alone could lose up to $12 million this fiscal year and another $19 million next Fiscal Year (FY 04); and
WHEREAS, before hearing of the Governor's new proposal, Long Beach City staff had already begun developing a three-year plan to address the City's structural deficit, which included serious reductions in service, significant impacts to employee compensation and/or benefits, and approximately a 15 percent reduction in the City's workforce; and
WHEREAS, without the consideration of the Governor's budget proposal, the City of Long Beach was already facing potential layoffs in key departments and with this proposal, layoffs will be certain and swifter than we had anticipated, with even public safety personnel at risk of job loss; and
WHEREAS, cities are limited in raising fees and taxes by Proposition 218, while the State has the ability to do this without the requisite vote of the people; and
WHEREAS, the City of Long Beach currently loses over $15 million annually in property taxes to the State, due to the revenue shift created by the Educational Revenue Augmentation Fund (ERAF) in 1991; and
WHEREAS, shifting $4.2 billion in locally controlled revenues for local services is neither equitable nor fair. No state program or department has been asked to shoulder such a disproportionate share of the budget pain. These cuts come on top of the nearly $5 billion each year that is transferred from local services to fund state obligations
NOW, THEREFORE, the City Council of the City of Long Beach resolves
Section 1. That if the state General Fund can no longer afford the expense of part or all of the VLF "backfill" that the Legislature and Governor of California are hereby respectfully urged to implement the provisions of current law providing for the reduction of the VLF offset in bad economic times and to restore the VLF in an amount necessary to reduce the VLF backfill.
Sec. 2. That the City of Long Beach hereby expresses its profound appreciation to the legislators who support such VLF restoration legislation.