HomeMy WebLinkAbout02/19/1991, C-2 - CONSIDERATION OF LEGISLATION (SB 169) TO REPEAL THE AUTHORITY GRANTED IN SB 2557 FOR COUNTIES TO CHARGE LOCAL GOVERNMENTS A ""BOOKING FEE"" AND ADMINISTRATIVE EXPENSES FOR THE COLLECTION OF PROPERTY TAXES." MEETING DATE:
1!liilil!' Pi' city of San Luis OBispo - -
Moire COUNCIL AGENDA REPORT ITEM N
FROM: Ken Hampian, Assistant Administrative 0 icer
Prepared By: Alison Lloyd, Administrative Analyst p`.
SUBJECT: Consideration of legislation (SB 169) to repeal the
authority granted in SB 2557 for counties to charge local
governments a "booking fee" and administrative expenses . for the
collection of property taxes.
CAO RECOMMENDATION: Adopt a resolution in support of SB 169 to
repeal the authority granted in SB 2557 regarding jail booking fees
and administrative expenses for the collection of property taxes.
DISCUSSION:
Background
As part of its effort to balance the budget, the state enacted
legislation known as Senate Bill 2557, which enables counties to
charge cities with the costs associated with "booking" arrestees
into county jail and for the costs of collecting property taxes.
Specifically, the bill provides that, "Notwithstanding any other
provision of law, a county may impose a fee upon a city, special
district, school district, community college district, college or
university for reimbursement of county expenses incurred with
respect to the booking or other processing of persons arrested by
an employee of that city, special district, school district,
community college district, college or university, where the
arrested persons are brought to the county jail for booking or
detention. "
i
The bill provides that the "booking" fee would be calculated such
that it "shall not exceed the actual administrative costs,
including applicable overhead . . incurred in booking or
otherwise processing arrested persons. " The charges would be
retroactive' to July 1990.
Unfortunately, since the bill does not provide a definition for
what constitutes a "booking" the scope of services on which the fee
would be based is ambiguous. To counties "booking" includes an
expansive list of services, whereas the League of California
Cities' Task Force contends that it only involves: 1) searching
the arrestee, 2) processing the arrestee's personal property
pursuant to Penal Code section 1412 and Government Code section
26640, 3) fingerprinting and photographing the arrestee, and 4)
entering charges against the arrestee as well as other descriptive
information into the county's records.
With respect to costs associated with the collection of property
taxes, SB 2557 provides that the administrative costs of collecting
city-related property taxes will be added to the county's 1989-90
property tax "base" share, thus building in these costs as a
permanent addition to the county's share of property tax revenues.
6- 2,
III�IIp ���U city of san oaispo
Gii% COUNCIL AGENDA REPORT
Page Two
Council Agenda Report
Cities and school districts throughout California have threatened
lawsuits on both the booking fee authority and property tax
administration charge. Their input was not included as part of the
State budget adoption process and as such they were unable to
explain the harmful effects the legislation would have on them. As
an example, a preliminary calculation done by the City of San Luis
Obispo indicated that by paying for the booking of prisoners and
property tax administration and collection services, the City would
incur costs of about $350, 000 which represented about 2% of the
total General Fund budget or about 30% of the needed increase in
revenues through increased user fees.
The League of California Cities has responded to the passage of SB
2557 by creating "Operation Budget Freedom", which is a concerted
effort to combine local grassroot action with a statewide program
and aims to : 1) repeal/replace SB 2557; 2) let cities be free of
the state budget process; and 3) to provide a long term revenue
base for cities and counties. The League has also urged cities
throughout California to oppose SB 2557 and to contact their
legislators to voice their opposition.
Senate Bill 169
This January, Senator Dan Boatwright introduced Senate Bill 169
which would repeal all provisions of SB 2557 except those
provisions which give counties the authority to enact business
license taxes and utility user taxes in the unincorporated area.
It would repeal the authority granted to counties to charge local
governments a "booking" fee and administrative expenses for the
collection of property taxes. The legislation would also freeze
the motor vehicle in lieu schedule for one additional year. As a
result, vehicle owners would pay the same amount next year as this
year; thereafter, the amount would decrease in following years
according to existing law. No one would pay any more than they are
currently paying.
Under the provisions of SB 2557, the maximum amount that counties
could receive is estimated to be about $330 million. This
estimation is based on the assumption that counties will be able
to collect all available revenue. The Vehicle License Fee (VLF)
extension as proposed in SB 169 would replace the lost county
funding since it is anticipated that it would produce approximately
$345 million. Since the revenue source would be permanent it is
anticipated that it would grow substantially each year. The
current split of VLF funds between cities and counties would remain
the same and not be affected by the provisions of SB 169. I
G - Z -2
""
city of san lues osispo
COUNCIL AGENDA REPORT
Page Three
Council Agenda Report
It should be noted that Governor Wilson's budget contains a
proposal to shift the program responsibilities for mental and
public health programs to counties. The intent is to support these
programs with an increase in VLF, amounting to approximately $800
million. There is additional revenue dedicated to these same
programs from an increase in the tax on alcohol, amounting to
approximately $190 million. The estimated state general fund
savings from shifting these programs to counties is approximately
$940 million.
According to the League of California Cities, the budget will not
preempt the discussions regarding SB 169. As such, the League is
urging cities throughout California to continue to express their
support for SB 169 to ensure that city issues are addressed during
the 1991-92 state budget process.
Follow-Up
Staff will forward the Council's resolution to appropriate State
legislators, other cities within San Luis Obispo County, and the
County.
ATTACHMENTS:
1. Resolution
2 . League of California Cities Bulletin 02-1991
NOTE: A copy of the bill is available in the Council Reading File
in the City Clerk's Office.
AL\sb2557
I
G - 2 -3
RESOLUTION NO. (1991 SERIES)
A RESOLUTION OF THE SAN LUIS OBISPO CITY COUNCIL
SUPPORTING THE LEAGUE OF CALIFORNIA CITIES
IN ITS EFFORTS TO REPEAL SENATE BILL 2557
BY ENDORSING SENATE BILL 169
AND IMPLEMENTING THE VEHICLE LICENSE FEE (VLF)
WHEREAS, the City of San Luis Obispo is on record strongly
opposing SB-2557, an ill-conceived piece of legislation which pits
local governments against each other in the struggle for
diminishing revenues, instead of addressing legitimate and
demonstrated County fiscal needs, burdened largely by State
mandates; and
WHEREAS, the City of San Luis Obispo recognizes that, in order
to have the. State Legislature reconsider this matter, it will
require the wholehearted support and cooperation of every county,
school district and city; and
WHEREAS, the League of California Cities has proposed a
solution (SB 169) which will provide additional revenue for
counties without the necessity of a tax increase;
NOW, THEREFORE, BE IT RESOLVED that the San Luis Obispo City
Council does hereby endorse SB 169 to:
1. Freeze the vehicle license fee depreciation schedule for
one additional year;
2 . Retain the county taxing authority with respect to
business license and utility users tax contained in SB-
2557; and
3 . Repeal all other provisions of SB-2557.
Resolution No. (1991 Series)
FURTHER, the City of San Luis Obispo urges unanimous support
for the League's proposal by every affected local entity in San
Luis Obispo County, thus clearly signaling the strength of our
position with the State Legislature.
Upon motion of seconded by
and on the following roll call vote:
AYES:
NOES:
ABSENT:
the foregoing resolution was adopted this day of
1991.
MAYOR RON DUNIN
ATTEST:
PAM VOGES, CITY CLERK
APPROVED:
CITY ADMINISTRA VE OFF CER
✓Y�I/!1
T TT
AL\sb2557
changing the allocation method for growth in the sales tax/revenue. eAdministration will work with local government representatives tbest means of achieving this end."
4. State-Mandated Programs. The Governor's Budgetfor1991continue the policy established in the 1990 Budget that changed
programs to optional programs(thereby eliminating state fund g to reimburse local
governments for nineteen mandates). The Administration so pledges to veto any
new mandate that does not contain a corresponding ap priation to cover the cost
of the mandate. Also,in a discussion of"State-Requ' d Programs,"it is stated that,
"The Administration looks forward to working coo ratively with local governments
to free them of unnecessary constraints and ondiscretionary demands for the
expenditure of local revenue."
5. Redevelopment Agencies. Legislatio n 1990 reduced the Special Supplemental
Subvention (for replacement o business inventory exemption losses) to
redevelopment agencies by ap oximately 25 percent. The 1991-92 Governor's
Budget includes only$9.6 mi ' n, a further reduction of approximately$30 million,
and states that this amou '...is to be allocated to those relatively few RDAs that
have disproportionate] relied on this subvention program for revenue to support
bond debt, and to hose RDAs in which Special Supplemental Subventions
historically have ovided more than ten percent of an RDAs revenues."
6. Subvention for Open Space. The 1991-92 Governor's Budget provides
approxi tely $13.9 million for the Open Space Subvention Program, $600,000 less
than a 1990-91 funding level due to the "trigger" reduction.
As note arlier, implementation of these and other proposals of the Administration will
requir enactment of over 50 legislative measures. The League is continuing to
co unicate with the Administration on these issues and will provide additional
i ormation as it becomes available or bills are introduced.
2. SUPPORT/SPONSOR Repeal of SB 2557 SB 169 (Boatwright) Introduced
Monday.
On Monday, Senator Dan Boatwright, former Mayor and Council Member from Concord,
introduced League-sponsored legislation to repeal the authority granted last year in SB 2557
for counties to charge local governments a "booking fee" and administrative expenses for
the collection of property taxes. The legislation also increases the Vehicle License Fees
(VLF) and dedicates that increase to backfill any loss which counties may incur from the
loss of this "fee authority."
The maximum amount counties could receive from the authority in SB 2557 is estimated
to be about $330 million. This assumes that counties can collect all available revenue.
Cities and school districts have threatened lawsuits on both the booking fee authority and
property tax administration charge. The VLF increase in SB 169 would produce
4 January 18, 1991
if _�
approximately $345 million—more than enough to backfill the loss from repeal of the
SB 2557 authority. The revenue source in SB 169 is permanent and grows substantially
each year. The current split of VLF funds between cities and counties remains the same
and would not be affected by the provisions of SB 169.
The Governor's budget unveiled last week contains a proposal to shift the program
responsrbilities for mental health and public health programs to counties (see the Budget
Article in this Bulletin). The Governor intends to support those programs with an increase
in VLF, amounting to approximately $800 million. There is additional revenue dedicated
to these same programs from an increase in the tax on alcohol, amounting to approximately
$190 million. The estimated state general fund savings from shifting these programs to
counties is approximately $940 million.
The Governor's budget, and specifically this proposal for county programs, provides a
number of opportunities which have not even been in the realm of possibility in recent
budget debates. The Governor's budget in no way preempts the discussions over SB 169,
nor is it the definitive solution for county fiscal problems. There are many other
opportunities which have been discussed previously and others which have not officially
surfaced, but will very much be a part of the budget debate. Cities should continue to push
hard for SB 169 to ensure that city issues are on the table when the negotiations over the
1991-92 state budget are in the closing phases.
Senator Boatwright will expect solid city support for his proposal. Please begin now to
voice your support of SB 169 with your legislator. As we mentioned last week, the bill will
likely be assigned to the Senate Local Government and Appropriations Committees and
may also be assigned to the Senate Revenue and Taxation Committee. Members of the
Committees have yet to be finalized, but should be available soon.
3. INFORMATION Fish and Game Fee Implementation. AB 1 r
1706. Statutes of 1990).
Last year the Department of Fish and Game sponsored legislatio tended to provide
revenues for its trust management responsibilities that require 1 project applicants to
pay a fee of $1250 for negative declarations and $850 for vironmental impact reports
when a notice of determination is filed. Governor Deu Tian signed the bill into law, but
requested the Department to sponsor cleanup le ' tion to exempt projects where the
Department's CEQA review is minimal or none ' nt. The Department was instructed that
any cleanup legislation would be opposed the legislative leadership.
The Department first published ' ctions on implementation of AB 3158. After local
government objected on the nds that such instructions were underground regulations,
the Department converte a instructions into regulations and on January 8, 1991, adopted
them on an emerge asis. The League was present at the emergency hearing and
objected to the osed regulations on a variety of grounds. The Office of Administrative
Law will iss decision on the proposed emergency regulations on January 22, 1991. The
Depar nt will also begin the permanent rule-making process and has scheduled hearings
5 January 18, 1991