Resolution 13550CITY OF ALAMEDA RESOLUTION NO. 13550
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 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; and
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 Council of the City of
Alameda 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 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.
BE IT RESOLVED FURTHER that the City of Alameda hereby expresses its
profound appreciation to the legislators who support such VLF restoration legislation.
I, the undersigned, hereby certify that the foregoing Resolution was duly and regularly
adopted and passed by the Council of the City of Alameda in a regular meeting assembled on the 21St
day of January, 2003, by the following vote to wit:
AYES: Councilmembers Daysog, DeWitt, Kerr, and Matarrese -
NOES: None.
ABSENT: Mayor Johnson - 1.
ABSTENTIONS: None.
IN WITNESS, WHEREOF, I have hereunto set my hand and affixed the official seal of said City this
22nd day of January, 2003.
Lara Weisiger, City Clerk
City of Alameda