CC RES 2003-008RESOLUTION NO. 2003-08
A RESOLUTION URGING THE CALIFORNIA LEGISLATURE TO REJECT THE
GOVERNOR'S PROPOSED SHIFT OF LOCAL VLF REVENUES AND TO HONOR
THE 1998 COMMITMENT TO RESTORE THE VLF
WHEREAS, prior to 1935, cities and counties collected property taxes on motor vehicles
to fund essential local public health and safety services; and
WHEREAS, in 1935, the Legislature first enacted the Vehicle License Fee (VLF) Act,
replacing the property tax on vehicles with a 1.75 percent fee charged against the value
of the motor vehicle; and
WHEREAS, in 1948, the rate of the VLF was increased to 2 percent of the value of the
vehicle; and
WHEREAS, in 1986, the voters voted overwhelmingly to constitutionally dedicate the
proceeds of the VLF to fund city and county services; and
WHEREAS, in 1998, a period of strong economic growth, the Legislature approved the
use of a portion of the rapidly growing state General Fund to reduce the VLF payments
of vehicle owners. This amount, known as the "offset", grew in future years to a 67.5
percent offset against the amount owed. The amount paid to local governments in lieu
of the reduced VLF payment is known as the "VLF backfill "; and
WHEREAS, the general fund budget of the city of Rancho Palos Verdes for fiscal year
2002 -03 is $13,340,250, of which $2,400,000, or approximately 18% is derived from the
Vehicle License Fee, which revenue source is the City's second largest source of
general budget funds; and
WHEREAS, the 1998 legislation and subsequent enactments contain clear provisions
that when insufficient funds are available to be transferred from the General Fund to
fully fund the offsets and backfill amount that the VLF offset shall be reduced and VLF
payments increased; and
WHEREAS, VLF and backfill revenues constitute 15 to 25 percent of typical city and
county general purpose revenues. On average, more than 60 percent of city general
fund spending and more than half of county general funds go to front line law
enforcement, fire, emergency medical services, and health care programs.
WHEREAS, revenues derived from the VLF and backfill are of critical importance in
funding vital local public health and safety services; and
WHEREAS, any failure by the Legislature to maintain the VLF backfill or restore the
VLF will cause widespread disruption in local government services essential to the well-
being of California citizens and their cities and counties; and
WHEREAS, Governor Davis' proposal to divert $4 billion in local VLF backfill payments
over the next 17 months fails to honor the 1998 commitment and is a direct assault on
local services that will be felt by every California resident; and
WHEREAS, shifting $4.2 billion in locally controlled revenues for local services is
neither equitable nor fair. No state program or department has been asked to shoulder
such a disproportionate share of the budget pain. These cuts come on top of the nearly
$5 billion each year that is transferred from local services to fund state obligations.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY OF RANCHO PALOS VERDES,
CALIFORNIA, that if the state General Fund can no longer afford the expense of part or
all of the VLF "backfill" that the Legislature and Governor of California are hereby
respectfully urged to act in a non - partisan manner to implement the provisions of current
law providing for the reduction of the VLF offset in bad economic times and to restore
the VLF in an amount necessary to reduce the VLF backfill; and
RESOLVED FURTHER, that the City of Rancho Palos Verdes hereby expresses its
profound appreciation to the legislators who support such VLF restoration legislation.
Attest:
PASSED, APPROVED, and ADOPTED this 4th da of February 2003.
City Clerk
State of California )
County of Los Angeles )ss
City of Rancho Palos Verdes )
Mayor
I, Jo Purcell, City Clerk of the City of Rancho Palos Verdes, hereby certify that the
above Resolution No. 2003 -08 was duly and regularly passed and adopted by the said
City Council at a regular meeting thereof held on February 4, 2003.
City Clerk
Resolution No. 2003 -08
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