California Propositions Impact Local Governments
Despite the love/hate relationship Californians have with the Proposition system, voters voiced their positions last night on several statewide ballot measures that impact the fiscal and environmental sustainability of our communities.
With fresh enthusiasm from a Texas defeat in the World Series, voters overwhelmingly rejected an initiative (Prop 23) funded largely by Texas oil interests to suspend California’s effort to curb greenhouse gas emissions. This defeat will allow the California Air Resources Board to continue with its implementation of Assembly Bill 32: Global Warming Solutions Act. Meanwhile, Governor Schwarzenegger will be handing off the AB 32 baton to California’s next “green governor” – Jerry Brown.
Voters also felt fresh enthusiasm for limiting the State’s ability to take funds from local governments – with the League of California Cities spearheading the campaign in response to the $5 billion in transit and redevelopment funds that were diverted to the General Fund in the 2009/10 budget. Proposition 22 closes the loophole which allowed the State to use gasoline tax revenue for sources other than transportation.
While cities and counties are celebrating victory over protection of local funding streams, the passage of Proposition 26 amends the California Constitution to make the majority of regulatory fees redefined as taxes – making it very difficult for communities to raise additional funds for needed transportation expenditures with a two-thirds majority needed for state or local fees which address environmental impacts. The Legislative Analyst’s Office expects increased transportation spending and State General Fund costs of approximately $1 billion due to Proposition 26 limiting any increases on Vehicle Registration Fees (used for local transportation and air quality programs), Vehicle License Fees and local sales taxes – both important sources of general revenue for local government. Further, local transit operators will be adversely impacted as the recent changes to the State’s transportation funding sources rely heavily on increased sales taxes on diesel fuels.