HomeMy WebLinkAbout1993-05-11 - AGENDA REPORTS - STATE BUDGET LEGAL CHALLENGE (2)AGENDA REPORT
City Manager Approval
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Item to be presented b
Michael Murphy
CONSENT CALENDAR
DATE: May 11, 1993
SUBJECT: State Budget/Legal Challenge
DEPARTMENT: City Manager
BACKGROUND
In response to the State of California's Fiscal Year 1992193 budget reductions, the City of Alhambra and
the Alhambra Redevelopment Agency have filed an Original Writ/Complaint with the California Supreme
Court challenging the constitutionality of the state's budget action with respect to cities and redevelopment
agencies. The case is entitled City of Alhambra v. Ikemoto.
The suit contends that a violation of Article XI of the California Constitution relating to local government has
occurred. The legal action asserts that property taxes are local taxes which may not be used for non -local
purposes. Furthermore, the suit notes that the state lacks the authority to allocate local resources to satisfy
state financial liabilities.
The City of Alhambra is also challenging the state reallocation of redevelopment agencies' funds. Article
XVI; Section 16 of the California Constitution prohibits the use of tax increment funds generated by
redevelopment for any purpose other than the direct benefit of the redevelopment area from which the tax
is generated.
The third element of the suit is a challenge to the state's preemption of local governments' authority to
impose taxes on tobacco. The suit argues that there is no statewide interest served by prohibiting local
taxation on tobacco.
The City.of Alhambra requests that all cities in California write to the California Supreme Court requesting
the Court to hear the case.
The state's action for fiscal year 1992/93 resulted in a revenue loss to the City of Santa Clarita in the
amount of approximately $512,500. The Legislature is currently considering reallocations of property tax
and redevelopment agency funds as part of the state budget balancing formula for fiscal year 1993/94.
Losses to the City of Santa Clarita are presently projected to fall within the $500,000 to $1,000,000 range.
RECOMMENDATION
Support the City of Alhambra's request. Transmit letters of support to the California Supreme Court,
League of California Cities, California Contract Cities Association, Independent Cities Association and the
City of Alhambra.
ATTACHMENT APPROVED
City of Alhambra letter
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City of Alhambra
RECEIVED
March 23, 1993
MAR 2 4 1993.
CITY MANAGERS OFFICE
CITY OF SANTA CLARIT A
Honorable Mayor and -Members of the City Council
Note: This letter is being sent to all Cities in
California
all
Re: City of Alhambra v. Ikemoto, et al
Second Appellate District
Case No. B073771 - (State Budget Litigation)
Ery .rat
Dear Mayor and Councilmembers:
Gateway
to the
The support that.the City of Alhambra has received to date is most
San Gabriel Valley
gratifying with regard to the litigation which is intended to require
the State of California to follow the "home rule" principles of the
state constitution with respect to cities and to be guided by the
ut
equally clear constitutional language relating to tax increment
Soutb First Street
funding for redevelopment agencies. In addition to the support from
Albambra
the County of Ins Angeles and the Independent Cities Association
California
(whose mer cities number 50) , we have received support from cities
91801
up and down this state and are receiving significant additional city
support daily (see attached list). We wish to thank each city that
has supported us on these issues that affect all of us. We look
forward to further support by cities.
We ask, in addition to requesting the state appellate court to hear
this matter, that you contact your regional organizations and your
representatives to the California Redevelopment Association (CRA) who
will be considering the redevelopment portion of this lawsuit at a
meeting to be held "April 2, 1993. In addition, the legal Advocacy
committee of the League of California Cities will be considering (also
on April 2nd) the position of that.cclmittee with respect to support
for this litigation. We urge you to contact your elected league
officials, staff, and the Legal Advocacy Cmmittee to indicate your
support for this effort to protect the principles of 'Thome rule."
Cities should resist this and any other challenge to this
constitutional priciple. •
l
We should also like to make you aware that there are at least 3 cases
pending in the Superior, Appellate and Supreme courts of this state
filed by special districts and a county which address in different
ways issues similar to the issues addressed in the Alhambra case. We
want you to know that our litigation is the ONLY case pe li ding before
the courts in which the cities' position about "harm rule" has been
clearly stated. Without this case it is possible that the courts will
decide some basic issues solely on the argument of special districts.
It would be a shame if the voice of the cities is not heard in the
courts now on this fundamental city home rule principle.
We will continue to keep you informed about this case.
Sincerely,
CITY OF ALHAMBRA
MICHAEL A. BIANCO
Mayor
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