Wildomar Budget Crisis: Letters And Statements Surrounding SB 89

Wildomar stands to lose $1.8 million in revenues as a result of Senate Bill 89, which was included in this week’s state budget package.

Here is a look at some of the press releases and statements surrounding Senate Bill 89 that have surfaced over the last 24 hours:

July 1--League of California Cities statement:

Just hours before Tuesday's late night budget vote, legislators were given a last-minute proposal to eliminate $130 million in city VLF funds (Vehicle License Fees), two-thirds of which currently goes to fund core police and fire services. SB 89 passed in both the Senate and Assembly and will result in the loss of vital funds that will be felt by every city in California. What should have been celebrated by cities due to the continuation of the important COPS and booking fee programs has turned into a fiscal nightmare as general fund VLF revenues that are largely used for public safety services have been swept into a locked account for community and state law enforcement.

Instead of receiving $130 million in VLF revenues, more than $80 million of which is used for police and fire services, and approximately $75 million in grants earmarked for law enforcement, cities will only receive the $75 million earmarked grants, effectively requiring cuts to local police and fire department budgets and other services. Because this bill was so last minute, legislators may not have understood the full ramifications of their vote. In fact, several new cities may be forced to disincorporate thanks to reckless legislation and disregard for transparency.

"The California Constitution requires the VLF to go to cities and counties. This legislation shifts it to fund a wide variety of state grant programs, effectively cutting local public safety funding. If Gov. Jerry Brown signs this bill, vital dollars for police, fire and every other city program will be decimated," said Modesto Mayor and League President Jim Ridenour.

"The League has asked Governor Brown to veto SB 89 since it is effectively a shell game that was sold to legislators as a fiscally sound plan to save public safety services which will only cause deeper cuts in public safety services. It is a direct threat to public safety funding and the very existence of some new cities that were promised VLF funding," said League Executive Director Chris McKenzie. "We strongly urge that it be vetoed and that the Administration work with the Legislature to enact responsible substitute legislation."

League Fiscal Advisor Michael Coleman has prepared a spreadsheet of city-by-city impacts on this reckless legislation. Please click http://bit.ly/kJXp2E to access.

June 30--Supervisor Jeff Stone’s Office (3rd District) press release: 

About a dozen counties – from San Diego to Mono – would be asked to consider a split from California to establish a new state with a balanced budget, secure borders, effective schools and a vibrant economy under a plan proposed today by Riverside County Supervisor Jeff Stone.

“California was once the world’s fourth largest economy and now struggles to hold on to eighth place,” Stone said. “Our taxes are too high, our schools don’t educate our children well enough, unions and other special interests have more clout in the Legislature than the general public. It has to change.”

Stone said he will outline the proposal in a report headed to the Board of Supervisors on July 12. He suggests the counties of Riverside, Imperial, San Diego, Orange, San Bernardino, Kings, Kern, Fresno, Tulare, Inyo, Madera, Mariposa and Mono be asked to consider forming the State of South California. Boards of supervisors and city councils within those counties would be invited to meet and discuss the feasibility of secession from California, Stone said.

In explaining his proposal, Stone said:

• California’s taxes are among the highest in the nation yet our deteriorating services slip year after year while state officials prop up disastrous budget policies by draining resources needed to help local residents.
• Regulations to control greenhouse gasses, and other unnecessary rules, have chased businesses out of California and devastated the economy.
• Political infighting has paralyzed California for more than decade, creating a state that is too large to govern.
• A huge portion of the state’s residents are on some form of public assistance and California has about 30 percent of the nation’s welfare load yet only 12 percent of the population.
• With limited resources available, California provides benefits that include in-state tuition to illegal immigrants, minimizing the financial resources available for legal residents who pay taxes.
• Once the darling of public education, California ranks 48th among states in test scores by one measure yet spends an exorbitant portion of the state budget on education.

Stone suggested the new state consider a part-time legislature, shifting governance more toward local control. Part-time legislators might receive only a $600 per month stipend and no other financial benefits except travel expenses to the new state capitol, he said.

Also open for consideration would be doing away with term limits, actually enforcing the state’s borders, adopting reasonable sales taxes and a provision like Prop. 13 that would control property taxes. Counties and cities interested in the proposal, including those Stone has not already identified, would be invited to sit down and discuss the proposal.

Stone said he will suggest that the Riverside County Executive Office coordinate a meeting at the Riverside Convention Center as soon as possible. He proposes that the county counsel’s office in each county offer suggestions about forming the 51st state. Residents and officials from each county and city would be welcome to offer ideas and testimony, he said.

“Are there huge challenges? Absolutely,” Stone acknowledged. “But the destruction of California has to stop and we won’t know what we can accomplish unless we sit down and consider the possibilities.”

June 30--Letter to Governor Jerry Brown from California Legislators:

As the Representatives of Western Riverside County, we are writing to ask for you to return Senate Bill 89 for amendments.  This bill will have a devastating effect on four new cities within our region and may well result in bankruptcy or un-incorporation of one or more of them.

The Cities of Eastvale, Jurupa Valley, Menifee and Wildomar have all incorporated within the past few years, and their fiscal stability was based on revenues from the vehicle license fee as appropriated in Section 11005(c) of the Revenue and Taxation Code.  SB 89 removes this funding source, a point that was not referenced in the Assembly Floor Analysis.

The revenue loss for the cities are as follows of Eastvale $3.1 million, Jurupa $6.2 million, Menifee $3.9 million and Wildomar $1.8 million.  This revenue accounts for 20% to 25% of the entire budget for these new cities.  These cities will be seriously impacted by this realignment and will have way no ability to recover from this devastating loss of revenue. The four cities in Western Riverside County (and unknown others statewide) may be forced into bankruptcy or un-incorporation as a direct result of this bill.

Jurupa Valley is scheduled to incorporate tomorrow (July 1, 2011) and is now facing a loss of approximately $6 million of their approximately $22 million proposed budget.  They are now a day before their incorporation ceremony having to reconsider incorporation after the citizens voted for cityhood in March of this year.

We do not believe this was the intent of the Legislature.  We believe this impact was not fully considered in the drafting or discussion of the bill and that most Legislators were unaware of this provision due to result of the last minute drafting of the language and the cities themselves were not made aware of this provision until it was too late to request amendments.

We recognize that SB 89 is a significant part of the budget agreement that was passed Tuesday night.  We respectfully ask that you return this bill for amendments to protect newly incorporated cities that may inadvertently be placed in jeopardy.

Sincerely,

KEVIN D. JEFFRIES                               PAUL COOK
Assemblyman, 66th District                      Assemblyman, 65th, District


JEFF MILLER                             BRIAN NESTANDE
Assemblyman, 71st District                      Assemblyman 64th District


BILL EMMERSON                           BOB DUTTON
Senator, 37th District                          Senator, 31st District

June 29--Letter to Governor Jerry Brown from Wildomar Mayor Marsha Swanson:

The City of Wildomar respectfully requests a new bill be drafted that addresses the disparate treatment of newly incorporated cities in SB 89.  This bill as drafted would reduce our balanced budget by 25% effectively forcing fiscal insolvency. 

We incorporated on July 1, 2008.  The Incorporation was the result of a Comprehensive Fiscal Analysis prepared in accordance with the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 and in accordance with the Governor’s Office of Planning and Research Guidelines.

SB 89 came into print late in the day on June 28, 2011 and was rushed through the process with little discussion.  It contains a provision that would sweep approximately $130 million of city general fund revenues from the current vehicle license fee formula to a special law enforcement account beginning July 1, 2011. The projected revenue loss to our City is catastrophic and may be an unrecoverable crisis effecting everything from police, fire, and the parks where our children play.

This legislation unfairly burdens newly incorporated cities.  We are asking for your help and consideration to rectify this oversight as new cities have a different funding mechanism that was not contemplated when SB 89 was drafted.  This is why we are desperately requesting that you re-evaluate how the implementation of the budget bill will disproportionately affect newly incorporated cities.   

Sincerely,

Marsha Swanson

Mayor

Cc: Senator Bill Emmerson

Assemblyman Kevin Jeffries      

Assemblyman Brain Nestande