Government Finance and Operations update 4/11/2014
AB 2119 (Stone) – Support
As Introduced February 20, 2014
CSAC supports AB 2119, by Assembly Member Mark Stone, which would allow counties to propose a transaction and use tax increases only in the unincorporated area of the county. The proceeds from the tax, if unincorporated voters approve it, could only be used in the unincorporated area.
A peculiar effect of the current construction of tax law is that residents of unincorporated areas are the only geographically distinct groups in the state without the choice to tax themselves for general government services. AB 2119 would fix that oversight.
Despite being the level of government directly responsible for the health and safety of the state’s residents, counties have very little tax authority. The sales tax is one of those authorities, but under current law counties can only impose such a levy countywide, with permission from all the county’s voters, including those who live in cities.
Many cities levy their own sales taxes, for the sole benefit of city residents. Those residents are often understandably reluctant to impose a further tax on themselves. AB 2119 would give residents who live outside of cities the same rights as those who live in them.
The Assembly Local Government Committee passed AB 2119 on Wednesday, April 9. The bill now moves to the Assembly Revenue and Taxation Committee.
Property Tax Postponement Program
AB 2231 (Gordon) – Support
As Amended on March 24, 2014
AB 2231, by Assembly Member Rich Gordon, would restore the Senior Citizens’ Property Tax Postponement Program that was eliminated in the February 2009 budget agreement.
The Senior Citizen’s Property Tax Postponement Program offered income-eligible seniors and the disabled the opportunity to postpone their property tax payments in exchange for full repayment with interest when their home is sold. The program had a minimal start-up cost and, in most years, generated revenue for the state General Fund. Unfortunately, in large part due to the recent recession and housing crisis, the program failed to pay for itself in 2007-08 and 2008-09, making it a target for elimination given the state’s budget crisis at the time.
Subsequent efforts to restore the program resulted in the passage of AB 1090 (Blumenfield) in 2011, a bill that authorized counties to opt to provide the program using local funds. Counties, however, were not authorized to place a priority lien on the property to ensure repayment of deferred property taxes. Without priority lien status, counties are limited in their ability to finance such a program, given their fiduciary responsibilities to taxpayers and other local agencies.
AB 2231 reestablishes the Senior Citizen’s Property Tax Postponement Program at the state level with important modifications to ensure that the state’s General Fund is protected during economic downturns, and keeping the program up and running when these residents need it most.
The Assembly Local Government Committee passed AB 2231 unanimously at its meeting on Wednesday, March 9. The bill now moves to the Assembly Revenue and Taxation Committee.
SB 942 (Vidak) – Support
As Introduced on February 4, 2014
SB 942, by Senator Andy Vidak, would require reimbursement for counties’ costs to administer special elections that occurred between January 1, 2008 and December 31, 2014. CSAC strongly supports SB 963.
The Senate Appropriations Committee placed SB 942 on its suspense file at its hearing on Monday, April 7. The bill’s fate will be decided when they take up the suspense file later this year.
SB 963 (Torres) – Support
As Introduced on February 6, 2014
SB 963, by Senator Norma Torres, would require reimbursement for counties’ costs to administer special elections taking place after January 1, 2013. CSAC strongly supports SB 963.
The Senate Appropriations Committee placed SB 963 on its suspense file at its hearing on Monday, April 7. The bill’s fate will be decided when they take up the suspense file later this year.