Good for Arnold! ... and then there is this FRom the Sac Bee..
Posted on 12/19/2003 10:09:33 AM PST by NormsRevenge
Way to go, Gov. Arnold! Declaring a "financial emergency," he has authorized the payment of state money owed to local government agencies, including the city of Bakersfield and Kern County.
It's a gutsy, much-needed move. Democrat lawmakers would be well-advised to support it. Look for another bone to fight Republicans over.
The money was caught in the sleight-of-hand that Sacramento politicians use to balance the state's budget and cover up their excessive spending.
During more than a decade of Republican and Democratic governors leading California, sales tax, property tax and other fees, such as the vehicle license fee, have been juggled around to support state programs, often at the expense of essential local services, such as police and fire.
The present "financial crisis" was created when California's new Gov. Arnold Schwarzenegger rolled back the unpopular vehicle license fee (car tax) that is supposed to go to cities and counties.
In hard-fought negotiations over the placement of a $15 billion bond measure and spending cap on the March ballot, Democratic legislative leaders last week blocked a bill that would have backfilled the car tax loss, making cities and counties whole.
Democrats claimed they would not agree to pay local government agencies what they are owed until they can evaluate Republican Gov. Schwarzenegger's entire proposed budget and proposed midyear cuts to state programs.
Facing an uproar and threatened lawsuits from cash-strapped cities and counties, Democrats would only agree to form a "task force" to study the crisis they inflicted on local governments.
Big whoop! Meanwhile, cities and counties, including Bakersfield and Kern, were preparing to lay off police officers and firefighters because they couldn't pay them. Deep cuts in local services, ranging from road repairs to public health operations, also were identified.
No doubt, Democrats were attempting to back Gov. Schwarzenegger into a political corner by using local government agencies and the money they are owed for leverage.
The governor and his Republican allies in the Legislature oppose raising taxes. Most Democrats insist the state's multibillion-dollar budget gap cannot be closed by spending cuts alone. It requires a combination of spending cuts and tax increases.
Political pressure created by a threat to public protection and the erosion of local government services just might change Republican minds.
But Schwarzenegger has come out swinging using an obscure state law that allows him to declare a "financial emergency" and begin paying cities and counties what they are owed.
Democratic leaders said the move leaves unanswered how the state will cover the payments. The Legislature has not yet approved Schwarzenegger's mid-year cuts.
Senate President Pro Tem John Burton, D-San Francisco, said the declaration of an emergency and the governor's direction to pay cities and counties were legally "questionable."
But not all Democrats are naysayers. Democratic State Controller Steve Westley gave Schwarzenegger his support. Westley said he will resume making the bimonthly payments to cities and counties, starting with $40 million on Dec. 26. Over the course of the fiscal year, local governments will get the full $2.6 billion.
"The state has a legal obligation to continue the backfill and to ensure that local governments are kept whole," Westley's chief counsel said.
The car tax fiasco gives further evidence that the Legislature's continued game-playing with tax revenues that should be going to local government must end.
Good for Arnold! ... and then there is this FRom the Sac Bee..
600 contributors pay at least $500 to attend twice-canceled event.
By Gary Delsohn -- Bee Capitol Bureau
Published 2:15 a.m. PST Thursday, December 18, 2003
excerpt follows..
The Foundation for Taxpayer and Consumer Rights, which had six people at the protest, has criticized Schwarzenegger for taking money from a variety of contributors with business before the state, including $100,000 from one of the biggest underwriters of workers' compensation insurance.
"He hasn't met with a single consumer group since taking office," protester Jerry Flanagan said. "And the policies he's been rolling out reflect the interests of the insurance industry executives he's in there wining and dining with."
Members of the group made a symbolic gesture of trying to get into the event with 21,200 green jelly beans -- the same dollar amount individual donors are allowed to give to candidates. Security was extra tight at the hotel and the demonstrators were not allowed inside.
Jelly Beans will not buy you access.. :-\ Cigars, on the other hand..
Years ago when the car tax was lowered, the state agreed to replace the money from other state funds. That "backfill" ended when the car tax was tripled and the cities and counties became entitled to the increased fees instead. Now Arnold has "repealed" the car tax increase, but without any way to provide the backfill.
The courts should rule that the cities and counties can impose a car tax of their own sufficient to make up the difference.
If a government entity lacks the power to tax, then it lacks the basic mechanism which permits its existence. The taking of the car tax years ago was a taking of whatever "sovereignty" cities and counties had. The courts should have ruled against it years ago.
Similarly, the federal courts should outlaw any payments of federal funds to the states and for the same reason. Controlling such tax money is a theft of sovereignty.
Without the theft of state moneys, there never could have been a 55 mile per hour speed limit nationwide. There have no doubt been many other instances of states being coerced into policies which they would not otherwise have supported due to the necessity of winning back their own taxpayers' funds.
The "car tax" rate has never changed. It was set at 2% of assessed valuation in 1948 and remains at 2% today, December 19, 2003.
What did change was that Governor Wilson, in 1998, agreed to begin subsidizing the rate payer from the general fund. The amount of the subsidy has ranged over the past 5 years from 25% to 67% of the tax owed, but the rate has always been at 2% and you have always owed the full amount.
Maybe it will help you to look at it this way.
When you receieved your DMV renewal notice in the mail this morning, it included a check. A check drawn from the general fund, made payable to the DMV with your vehicle liscense number printed in the lower left corner.
When it comes time to pay your DMV renewal fees to the state, in early February, you will tear off the lower one third of the notice and attach your check for your portion of the amount due and attach the check you received 45 days earlier from the State Treasurer, which covers 2/3s of your VLF tax obligation. You then mail all three items to DMV.
actually your refering to baker, but you're not off anymore than most Californian's facts on issues. isn't that why your here, for the true facts?
My wife has taken care of our car registrations for years, so I haven't seen the paperwork over this period of time. She does not recognize what you are describing, but you appear to be saying that a portion of the form was an identifiable check from the state to the DMV.
I never considered the DMV to have been a collector of county fees, but that is evidently what was happening.
Were the fees collected in this fashion distributed in accordance with county receipts or was there some sort of re-distribution of vehicle license fees across the state?
Due to mis-reporting in the press, this topic will continue to come up, Amerigomag. Perhaps you could post on your personal page a two or three paragraph explanation of why the cities and counties are in pain and others could copy and paste to supply an accurate clarification. This would be superior to allowing Freepers to be misinformed and would reduce any ambiguity introduced by those of us less well informed.
Perhaps FreeRepublic needs a "FANQ", Frequently ANswered Questions, to which people can be directed.
When the state took over the collection of property tax on motor vehicles from the counties in 1935 it agreed to return most of it to the counties on a per capita basis after deducting a $500K administrative fees. The state began collecting the revenue to "equalize" the tax rate across the state which had varied from county to county and from city to city within a single county before 1935. Over the years the state has retained an increasingly larger portion of the fees and today they retain about 60% of the revenue collected.
Since the tax rate remains at 2% the reimbursement is still 40% of that 2% regardless of who pays the tax. Davis began to argue that the counties should only be reimbursed up to 40% of the fee actually paid by the vehicle owner and that was only about 1/3 of the total tax theoretically collected by the DMV last year. The remaining 2/3s was theoretically paid to the DMV from the general fund via the "VLF offset" mechanism. As a result the counties share was reduced to about 1/3 of what they were actually owed under the Revenue and Taxation Code section that governs the redistribution.
The "VLF offset" was, in fact, a smoke and mirrors accounting gimmick that Wilson came up with because he knew the counties would never actually allow a reduction in the VLF rate since they couldn't replace the lost revenue because they had surrendered the power to apply property taxes to motor vehicles in 1935.
Last week the legislature said they would pay nothing, not even the 33% amount Davis had been paying. That was the last straw and the affected parties sued on Wednesday. Schwarzenneger then raided other program's and ordered the full amount to paid out this week.
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