Government Finance and Operations 08/19/2011
AB 506 (Wieckowski) – Oppose
As Amended August 15, 2011
AB 506, by Assembly Member Bob Wieckowski, would require local agencies to undergo a “neutral evaluation” before seeking bankruptcy protection.
The most recent amendments do nothing to remove CSAC’s strong opposition. The bill continues to require a county in severe fiscal distress to jump through potentially unnecessary and unhelpful hoops prior to seeking the financial protections from federal bankruptcy court that it may desperately need. The consequences could be disastrous in terms of maintaining public services in that county and could potentially create additional liabilities for the state and county. Bankruptcy judges already have the job of neutrally determining whether a filer is in fact insolvent. The process contemplated by AB 506 only adds unnecessary delay.
AB 506 remains in the Senate Rules Committee.
Property Tax Administration
AB 946 (Butler) – Support
As Amended August 16, 2011
AB 946, by Assembly Member Betsy Butler, was amended this week to restart the successful State-Local Property Tax Administration Loan Program.
Under the program, a county can request a loan up to a specified amount to improve the efficiency of its property tax administration system and to reduce backlogs. Doing so benefits all levels of government: counties, cities, special districts, K-14 schools, and the state.
The bill authorizes the state to loan a total of $50 million. Each county’s loan amount is determined by its statewide share of assessment duties, with a $100,000 minimum amount to ensure that every county can realize a benefit from the program. County departments involved in property tax administration are required to consult with each other to determine the best way to allocate the funds. Provisions of the bill ensure that the funds will be used to supplement, not supplant, current activities.
This program was successful before, and the passage of AB 946 can make it successful again.
The Senate Governance and Finance Committee will consider AB 946 at its hearing next Wednesday, August 24.