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C.22

To:	Board of Supervisors
From:	Transportation, Water and Infrastructure Comm
Date:	December 8, 2009

Contra

Costa

County

Subject:

Potential Ballot Measure to Protect Local Funding From State Diversion

APPROVE	OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR	RECOMMENDATION OF BOARD COMMITTEE

Action of Board On: 12/08/2009

APPROVED AS RECOMMENDED

OTHER

Clerks Notes:

VOTE OF SUPERVISORS

AYE:

John Gioia, District I Supervisor
Gayle B. Uilkema, District II Supervisor
Mary N. Piepho, District III Supervisor
Susan A. Bonilla, District IV Supervisor
Federal D. Glover, District V Supervisor

Contact:

John Greitzer 335-1201

I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown.
ATTESTED: December 8, 2009
David Twa,

BY:	, Deputy

RECOMMENDATION(S):

ACCEPT report from the Transportation, Water and Infrastructure Committee on potential ballot measure to protect local funding from state diversion.

FISCAL IMPACT:

NONE from the recommended action. If the proposed ballot measure makes it to the November 2010 ballot and voters approve it, the County's local property tax revenue, redevelopment funds and transportation funds will be secure from diversion by the state.

BACKGROUND:

A coalition of local government, transportation and industry officials is working on a ballot measure they believe would provide complete protection for local government revenue, redevelopment agency revenue and transportation funding from being diverted or “raided” by the state for budget reasons.

BACKGROUND: (CONT'D)

The coalition includes the League of California Cities, the California Transit Association and the California Alliance for Jobs. They have submitted the proposed ballot measure to the California Attorney General’s Office for review and hope to have the measure on the November, 2010 ballot.

The Transportation, Water and Infrastructure Committee received a report on the proposed ballot measure on November 15 and determined to provide the report to the full Board of Supervisors.

The proposed ballot measure is entitled the "Local Taxpayer, Public Safety and Transportation Protection Act." The coalition has submitted two versions of the measure, one showing all the proposed changes to state code (attached) and a briefer version showing the new language without all the changes. The briefer version was not available at the time this report was written.

There have been ballot measures and legislation in the past that provided protection to transportation funds that the state has diverted in recent years to help cover the state budget shortfall. The most recent was 2006’s Proposition 1A, which limited state diversions to no more than twice in a ten-year period, and required that one diversion be “paid back” to the transportation fund before another diversion could occur.

However, the state has continued to attempt to defer or discontinue its transportation funding distributions to cities, counties and transit agencies. Recently the California Transit Association won a court case which overturns the state’s diversion of transit funding to other purposes. The California Supreme Court ruled the state’s actions were illegal and the funds should be returned.

The proposed ballot measure would provide what its sponsors believe is ironclad protection from further state diversions. The measure applies to local tax revenues, local redevelopment revenues, state gas tax distributions (known as the Highway Users Tax Account or HUTA funds), state sales tax on gasoline (known as Proposition 42 funds), and public transit funds from the state Public Transportation Account and Transportation Development Act (TDA) funds, which are distributed by formula and grants to public transit agencies throughout California.

The ballot measure would specify that the state may not take, borrow or change the status of any of the funds mentioned above.

The California State Association of Counties (CSAC) has not yet taken a position on the proposal. CSAC expects there will be numerous ballot measures covering the same issue on the ballot, some of them specific to the funding issue and some of them larger ballot measures dealing with the entire structure of state government, including funding. CSAC staff indicated CSAC likely will wait until it is known which measures are on the ballot before deciding whether to endorse any measure.

If the proposed measure is approved by the Attorney General’s Office, the sponsors will seek widespread support in advance of the 2010 election. It is likely the Board of Supervisors will be asked for its support. Staff will report back to the Transportation, Water and Infrastructure Committee if and when such a request is received.

Attached are a summary of the measure published by the coalition of sponsors, along with the full text of the proposed ballot measure which is still under review by the Attorney General's Office.