Speaker's Commission on State / Local Government Finance

Plan would shift more property tax income to local governments

By Michael Gardner
August 25, 2000, San Diego Union-Tribune

SACRAMENTO -- Key lawmakers this week crafted sweeping plans to guarantee more money for cities and counties -- years after the state began raiding their local property tax funds.

Immediate relief would come in the form of $200 million to be shared by cities and counties this year. San Diego County would receive $8.5 million; the city of San Diego would get $1.5 million.

More important, local officials say, is legislation that would limit how much the state receives in local property tax revenues. The bill could save cities and counties $300 million annually once fully implemented in 2004.

San Diego County supervisors say local governments deserve more. The state has a $12.3 billion budget surplus, but the proposed legislation would set aside just $200 million for general relief to cities and counties.

"Crumbs," is how San Diego County Supervisor Dianne Jacob described the $200 million offer. "It's payback time."

The state began dipping into local property tax revenues during the recession in the early 1990s, ostensibly to help finance schools. The annual take by the state is
about $4 billion. But over the years the state has provided new revenues for local governments who, by many estimates, now fall about $1 billion short.

Senate President Pro Tempore John Burton, D-San Francisco, is behind the bill to freeze the property tax shift at current amounts. Counties and cities would receive the full benefit of additional tax money -- not the state -- as property values rise. The state receives about $1 billion more than it took in 1993-94 because of increased property values.

"We're trying to stop the bleeding. We're supportive of any strategy to get the bill through," said Steve Szalay, who represents a coalition of counties. The local government plan appears to have more than enough support to move out of the Legislature. Gov. Gray Davis has not committed to the proposal.

Local governments have some leverage as lawmakers look to adjourn for the year on Thursday. Counties won the first round of their court challenge to the property-tax shift. It could cost the state as much as $10 billion to return the money if counties prevail in the higher courts.

While no formal offer is on the table, the Davis administration and some legislative leaders are in preliminary talks. One scenario: County officials would drop the lawsuit in return for limiting the property tax shift.

"It's being discussed," said Assembly Speaker Robert Hertzberg, D-Van Nuys.

The separate $200 million this year, however, is not guaranteed and could be directed to other spending proposals.

David Rosenberg, who advises Davis on local government issues, said yesterday the governor is waiting for the Legislature to act.

"The governor would still like to see that $200 million go to local government, but the final chapter has not been written," Rosenberg said.

Rosenberg dropped hints of more aid to cities and counties. "I am confident that the money targeted toward local government will be increased even more when it all shakes down," he said.

In recent years, the state has returned increasing amounts back to local governments. Davis gave $150 million in one-time money to local government in 1999-2000. During a 1998 campaign debate, Davis said:

"We stole it fair and square and we've got to give it back. I promise to do just that. It will be over a period of time, but we will give the money back because it wasn't ours in the first place."

In other action:

An attempt to legalize blackjack in California card clubs was defeated yesterday in the state Senate, despite arguments that the clubs should be able to offer the same games as Indian casinos.

Sen. Jim Brulte, R-Rancho Cucamonga, said if card clubs want to be able to offer blackjack they should get voter approval.

The Senate voted 22-10 to defeat AB 1429 by Assemblyman Dick Floyd, D-Gardena, that would allow card parlors to offer blackjack or twenty-one, as the popular casino game is called.

A bill that would ban racially motivated traffic stops by police has stalled in the Senate, the victim of a debate over whether officers should have to record the race of those they pull over.

The measure would prohibit a practice known as racial profiling -- officers stopping motorists because they are minorities.

The proposal also would require officers to take extra training in how to prevent racial profiling and would require them to give their business cards to motorists they stop but don't cite or arrest.

But critics say courts have already ruled that racial profiling is illegal. They contend SB 66 by Sen. Kevin Murray, D-Culver City, should require that officers record the race of the people they stop.

The Associated Press contributed to this report.
Copyright 2000 Union-Tribune Publishing Co.

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