HomeMy WebLinkAboutAGENDA REPORT 1990 0620 CC REG ITEM 11MBERNARDO M.PEREZ
Mayor
SCOTT MONTGOMERY
Mayor Pro Tem
ELOISE BROWN
Councilmember
CLINT HARPER, Ph.D.
Councilmember
PAUL W. LAWRASON, Jr.
Councilmember
LILLIAN KELLERMAN
City Clerk
MOORPARK I'rEM -II.M.
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City CouWI Meeting
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M E M O R A N D U M
STEVEN KUENY
City Manager
CHERYL J.KANE
City Attorney
PATRICK RICHARDS, A.I.C.P.
Director of
Community Development
R. DENNIS DELZEIT
City Engineer
JOHN V. GILLESPIE
Chief of Police
RICHARD T. HARE
City Treasurer
TO: The Honorable City Council
FROM: Craig Phillips, Administrative Assistant D
DATE: June 13, 1990 (City Council Meeting 6- 20 -90))
SUBJECT: Use of Vehicle License Fees by the State to
Balance the Budget
The State budget projections show a deficit of $2.6 to $3.6
Billion. The Legislature may cut back on subventions to
cities such as Vehicle License Fees (VLF) even though they
are not meant for State programs. The VLF is guaranteed by
the Constitution as a local government revenue.
Consequently, the State could offset expenses by shifting
cities' shares of VLF to counties.
Studies by the League of California Cities show that cities
have lost $106 per capita since 1978 after the VLF is
adjusted for inflation. In addition, Federal revenues have
declined by 78 %, and other State revenues to cities have
remained relatively flat over this period.
It is anticipated that there will be little notice by the
Legislature if or when VLF is used to close the State budget
deficit gap.
STAFF RECOMMENDATION
It is recommended that the Mayor be authorized to send a
letter to the Governor, our State Representatives and key
leaders of both parties in the Senate and Assembly in
opposition to the use of VLF to balance the State budget.
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799 Moorpark Avenue Moorpark, California 93021 (805) 529 -6864
BERNARDO M. PEREZ
Mayor
SCOTT MONTGOMERY
Mayor Pro Tern
ELOISE BROWN
Councilmember
CLINT HARPER, Ph.D.
Councilmember
PAUL W. LAWRASON, Jr.
Councilmember
LILLIAN KELLERMAN
City Clerk
MOORPARK
June 21, 1990
The Honorable George Deukmejian
State Capitol
Sacramento, CA 94268 -0001
Subject: Vehicle License Fees
Dear Governor Deukmejian:
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P. , .. ,,.... nivnMr U0, H.I.I: J.
Director of
Community Development
R. DENNIS DELZEIT
City Engineer
JOHN V. GILLESPIE
Chief of Police
RICHARD T. HARE
City Treasurer
We have learned that the State may be considering shifting
the Vehicle License Fees (VLF) from the cities to the
counties to help balance the State Budget. It is unfair to
consider such a major change just as cities are adopting
their 1990 -91 budgets. The VLF is historically a revenue
source designated for cities and should not be altered
without concomitant alternative revenue to cities.
The potential of taking all or part of VLF is especially
unfair for cities where VLF is a major revenue source. The
City of Moorpark incorporated in July 1983. The City's
General Fund primarily consists of Property Tax, Sales Tax
and Vehicle License Fees. These three sources account for
about 80 percent of the City's General Fund.
At incorporation, Moorpark was granted approximately eight
percent of the Proposition 13 one percent tax rate. As such,
we are considered a low property tax city. In comparison,
the local school district receives 33 percent; the County 27
percent and the Fire District 17 percent of the property
taxes collected in the City of Moorpark.
The City will receive about $900,000 in sales tax revenue in
1989 -90. This is about $35 per capita. This is less than
half the statewide average per capita amount. As you know,
sales tax is paid based on point of sale. Since Moorpark
competes on a regional east Ventura County basis with the
larger more strategically located cities of Simi Valley and
Thousand Oaks, it is unlikely that Moorpark's sales tax will
grow much more than increases i.n the CPI and population.
799 Moorpark Avenue Moorpark, Califomia 93021 (805) 529 -6864
The Honorable George Deukmejian
June 21, 1990
Page 2
Moorpark's sales tax revenue will most likely continue to be
based on convenience and neighborhood commercial uses.
Moorpark receives about $900,000 in Vehicle License Fees
(VLF) . The VLF is about 25 percent of our total $3.6 Million
General Fund revenue. Loss of even a portion of VLF would
have a major impact on our ability to provide services.
Moorpark's incorporation was determined feasible based upon
the availability of VLF. Our annual law enforcement costs
are over $1.8 Million.
The potential loss of up to 25 percent of our General Fund
could not be absorbed without new and increased taxes on our
citizens. As you know, such actions require a vote of the
citizens. As a relatively new city created after
Propositions 13 and 4, we already impose available fees and
special assessments available to a general purpose
government.
Shifting the budget problem from the State to a city such as
Moorpark is not the solution. The Moorpark City Council
urges you to find alternative means to balance the State's
1990 -91 Budget.
Sincerely,
Bernardo M. Perez
Mayor
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cc: California League of Cities