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Government Relations. Shaping the Future The 2010 CMRTA Annual Conference Sacramento, California. 2010-11 State Budget Spending at $87.5 Use tax reporting extended permanently Rainy day fund to the voters first Un-promised Federal revenues Mandates Local focus Pension reform

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Government relations

Government Relations

Shaping the Future

The 2010 CMRTA Annual Conference

Sacramento, California

www.MuniServices.com


2010 11 state budget

2010-11 State Budget

  • Spending at $87.5

  • Use tax reporting extended permanently

  • Rainy day fund to the voters first

  • Un-promised Federal revenues

  • Mandates

  • Local focus

  • Pension reform

    Budget Zinger = Bad Politics

  • SB 848 (Hollingsworth) Transient Occupancy Taxes

  • League, local labor, MuniServices and others stopped the bill at 6:02 am by a 12 to 33 vote

2010-11 State Budget

On the 100th day they rallied

www.MuniServices.com


November election

  • Proposition 1A (2006) Prohibits state from using state sales tax on gas for non-transportation purposes

  • Proposition 1A (2004) Prohibits state from taking local government revenues

  • Proposition 42 (2002) Dedicated state sales tax on gas to transportation and transit improvements

November Election

The initiative process

State-local relationship

www.MuniServices.com


November election1

  • Revokes the state’s ability to borrow local government property tax funds (currently authorized by 2004 Prop 1A)

  • Prohibits state from taking or borrowing HUTA that currently funds local transit/transportation services

  • Prevents state redirecting locally levied taxes, including parcel, sales and utility user, hotel currently passed

  • Prohibits state from taking, borrowing or redirecting existing funding for public transit on gas

  • Adds constitutional protections to prevent the state from raiding redevelopment funds or shifting these funds for other state purpose

November Election

Proposition 22

Local Taxpayer, Public Safety and Transportation Protection Act of 2010

www.MuniServices.com


November election2

Proposition 25/ Changes Vote Requirement for Budget

to Simple Majority

  • Support: California Teachers

  • Oppose: Chamber of Commerce

    Proposition 26/ Requires Supermajority Vote on

    Certain Taxes

  • Support: California Chamber

  • Oppose: League

    Proposition 19 - Legalizing Marijuana and Allow Taxes

  • Support: Service Employees International

  • Oppose: League, California Chamber and State DA’s

November Election

Proposition 19: “The only candidate that voters are paying attention to”

Proposition 26: “Clear reaction by business groups to Proposition 25”

www.MuniServices.com


November election3

Transactions and Use Taxes

  • Five new districts were approved in June

    Utility Users Taxes

  • Three UUT measures to increase or expand UUT in June were approved

    Hotel Taxes

  • Three cities and two counties considered increases; 1 validated tax; and 2 increases were submitted to voters

November Election

Local balloting

Revenue protection and raising

www.MuniServices.com


November election4

Candidates

  • Governor and Constitutional Officers

  • Legislature / Assembly and Senate

  • Local Candidates

November Election

“Don’t Forget to Take Out Your Trash – Vote November 7”

Billboard on Eastbound Highway 80

www.MuniServices.com


2010 legislation

Business License/ Regulations

  • AB 1822 (Swanson) Massage Therapy (Vetoed)

  • AB 2038 (Eng) FTB: Professional/ Occupational Licenses (Died)

  • AB 2294 (Block) Pedicabs. Licensing (Chaptered)

  • AB 2332 (Eng) Contractors: licenses (Vetoed)

    Transient Occupancy Taxes

  • SBX6 2 (Calderon) TOT (Died)

  • SB 848 (Hollingsworth) TOT (Died)

    Sales and Use Taxes

  • AB 2060 (Calderon) Exemption: Fixed Price Contract (Vetoed)

  • AB 2078 (Calderon) Use Tax Notification (Died)

2010 Legislation

The score

Signed: 726

Vetoed: 298

www.MuniServices.com


2010 legislation1

Economic Development

  • SB 71 (Padilla) Economic Development: Sales and Use Tax Exclusions (Chaptered)

    Redevelopment

  • AB 2531 (Fuentes) Redevelopment: Job Creation (Vetoed)

    Local Issues

  • AB 155 (Mendoza) Municipal Bankruptcy (Died)

  • AB 2317 (Saldana) Nuisance Abatement (Vetoed)

  • AB 2756 (Blumenfield and Feuer) Mobile Billboard Displays (Chaptered)

2010 Legislation

The score

Signed: 726

Vetoed: 298

www.MuniServices.com


2010 legislation2

Supported

  • AB 2064 (Huber) State and Local Government: Salary Disclosure (Died)

  • SB 501 (Correa) Local Government Compensation (Died)

    Opposed

  • AB 827 (De La Torre) Contract Limitations (Vetoed)

  • AB 1955 (De La Torre) Local Government Compensation (Died)

    Neutral

  • AB 194 (Torrico) Retirement Contributions (Vetoed)

  • AB 900 (De Leon) Property Tax Reimbursement (Chaptered)

2010 Legislation

Transparency in government

The Legislature’s response

The League’s response to selected legislation

www.MuniServices.com


2010 legislation3

SB 1036 (Cedillo) Tax Administration: FTB

  • Sponsored by the CMRTA the bill would have provided the authority for cities to use contractors to achieve their revenue goals by defining “employee” to include contractors to help them with fill these goals

  • The bill does not increase any local or state tax

  • Any contractor would be under strict privacy and confidentiality restrictions

2010 Legislation

CMRTA retained its first lobbyist in 2010

Politics interfered with good policy

www.MuniServices.com


Utility users tax streamlined sales tax

Federal and State UUT Legislation - Defeated

  • HR 1521, Cell Tax Fairness Act of 2009

  • AB 2545, Prepaid Communication Services: Taxes

    Federal Streamlined Legislation - 2011

  • HR 5660, Main Street Fairness Act

    Local Impact

  • Threats to UUT

  • Threats to collection of UUT on prepaid wireless communications

Utility Users Tax/ Streamlined Sales Tax

Cities prepared, stood ready, and aimed when called to defeat measures

www.MuniServices.com


Economic revenue outlook

  • Federal Reserve is considering second wave of monetary easing to combat potential deflation from too-low inflation and sluggish recovery

  • California's budget, employment, water and transportation problems coupled with an unfriendly business environment continue to hold back economic recovery

  • Potential expansion of sales tax base to include services would stabilize the tax base

Economic/ RevenueOutlook

Establishing a new normal with declining revenues

Governments

www.MuniServices.com


Economic revenue outlook1

  • Homebuilders confidence in the housing market continues at the lowest level in 18 months amid worries traffic of potential buyers is falling

  • Expect no change over next six months

  • Weakest sectors are construction, government, wholesale trade and manufacturing

  • Tight credit and nervous investors perpetuate flat economy

Economic/ RevenueOutlook

Establishing a new normal with declining revenues

Industries

www.MuniServices.com


Economic revenue outlook2

  • Expect decent but not robust holiday sales, moderate growth in restaurants, strong growth in service stations and flat growth in business-to-business sector

  • Car sales will remain flat during 2010 with a slight increase of 3% in 2011

  • According to an LA Times article (9/27), the State is owed $1.4B from businesses who have collected sales and use tax but have not remitted to the SBE

  • This represents $190M in local taxes or 4% of annual local taxes

Economic/ RevenueOutlook

Establishing a new normal with declining revenues

Consumers

www.MuniServices.com


Shaping the future

  • Vote November 7

  • Participate and encourage CMRTA legislative goals

  • Be innovative, creative and a visionary

  • Use technology as advocacy tool: it’s affordable and quick

  • Be resourceful and use your resources

    • CMTRA advocate and legislative team

    • League of California Cities

    • MuniServices’ Government Relations team

Shaping the Future

5 take-away solutions to shape the future for legislative success

www.MuniServices.com


Shaping the future1

Contact

Fran Mancia, Director of Government Relations

P: 800.800.8181 (5013)

E: [email protected]

Brenda Narayan, Legislative Communications

P: 800.800.8181 (5014)

E: [email protected]

MuniServices

League of California Cities Building

1400 K Street, Suite 301

Sacramento, CA 95814

Shaping the Future

Public-Partnerships

CMRTA, League of California Cities, California Redevelopment Association, California Contract Cities Association, and others

www.MuniServices.com


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