Loading...
HomeMy WebLinkAbout1996-10-22 - AGENDA REPORTS - PROPOSITION 218 (2)AGENDA REPORT City Manager l oval Item to be presented by: Steve Stark NEW BUSINESS DATE.. October 22, 1996 SUBJECT: PROPOSITION 218 DEPARTMENT: City Manager BACKGROUND Recently Proposition 218 qualified for the November 1996 ballot. This proposition, if approved, will become article XIIIC of the California Constitution and will further restrict the means by which public agencies can impose taxes, assessments, and fees which are related to the ownership of real property. Proposition 218 will also authorize the voters to repeal or reduce taxes by initiative. Furthermore, cities must conduct proposed tax elections concurrent with local city council elections. Cities will be required to comply with new conditions before imposing a tax, fee or assessment. And current fees and assessments will either have to meet one of the four exemptions or be submitted to the electorate for their approval. Proposition 218, if approved by the voters, will have a severe impact on the ability of local governments to raise revenue. City Impacts: Although it appears that the City's current assessment districts would be not have to be re -submitted for ratification because they fall under one of the four exemptions, any future increases must be submitted for voter approval. The City would have the responsibility of conducting elections for each proposed increase, even if the cost for the election is more than the proposed increase. The cost for these elections are approximately $5400. If voters chose to defeat a proposed increase, the City would then be in the position of having to reallocate priorities. The City contracts services from Los Angeles County. These services will also be subject to the provisions of Proposition 218 and the impacts to those services will also affect the City. The Los Angeles County Fire Department recently announced the devastating effects which Proposition 218 would have if passed by the voters. Fire Chief Freeman explained that the measure has a potential $50 million impact on their budget. This results in 166 fire fighters not working everyday and the closing of one fire station in every city they serve, including Santa Clarita. Q� Agenda itern:zeo s The County Library system would also be heavily impacted. According to the County Librarian the impacts of Proposition 218 would drastically reduce the hours and services the library would be able to offer. Residents currently pay $22 a year to maintain the local libraries. If the measure passes it appears the Community Facilities District which maintains those same libraries would be prohibited. Other Impacts/Issues: Transfer of Power to Sacramento. The measure would make it very difficult for local communities to raise revenue to provide police, fire, and other essential services. Only the State Government would have the power to impose a tax without a vote of the people. This will transfer local decision making to Sacramento where interest groups have tremendous influence.. California's public schools are a good example of this: because the only local revenues available to schools require a two-thirds vote, schools are dependent on Sacramento. Shift of Power from Voters to Landowners. Provisions in the initiative grant the right to vote on local assessments only to property owners, and in proportion to the amount assessed each would pay. Instead of one person, one vote, this system gives large landowners large votes; homeowners small votes; and renters no vote. Under Proposition 218 votes are denied to millions of renters but granted to foreign corporations. This gives a minority of voters a majority of power. Elimination of Lifeline and Conservation Rates. These are discounted rates which are used to assist the elderly and poor and promote conservation of energy. Because the article imposes strict calculations based solely on the cost of providing the service to property, fee systems which subsidize these programs would be prohibited. Requires all Public Agencies to Pay Their Share in Assessment Districts. Schools, Community College Districts and all other public agencies will be required to pay their share of the assessments. California teacher's oppose Proposition 218 because it imposes a new tax on public school property, diverting millions of dollars from classroom programs to pay for non -school expenses. High Cost for Unnecessary Notices and Hearings. Cities would be required to conduct a hearing and election on every increase to property related fees and charges. This process imposes a hearing which is followed by an election. The Measure is Poorly Drafted and Will Require Costly Litigation to Clarify its Meaning. The measure is very vague and ambiguous which makes it difficult to interpret and apply. This is a constitutional initiative, not a statutory measure. Therefore, the detail that we are looking for and need is not there. It will have to be determined later by statute or court actions. RECOMMENDATION Due to the disproportionate voting power which gives large land owners more power than the homeowners, the increase in costly administrative procedures, and the transfer of local authority to the state, staff recommends that the City Council take a formal position opposing Proposition 218.