Joining other municipal governments through the League of California Cities, the city council passed an emergency resolution Jan. 15 to put pressure on the California Legislature to reject this shift in VLF revenue and to restore VLF to its former level.

"The message that all the cities are sending the state is 'We want to save our neighborhood,' " said Mayor Nick Streit. "Cuts could be made in safety, in our streets, the maintenance of parks ... that's not acceptable."

"The cities are being very aggressive now in going after the Legislature," he said.

"Los Gatos will join [other cities] in a strike forth approach to make the state aware that we simply cannot absorb the impact of the VLF takeaway. Cities and towns are finally up against the wall. There's nothing to give, and we're simply going to have to fight," said Mayor Sandy Decker.

The VLF comprises an average 15 to 25 percent of city and county general purpose revenues, making it the third largest source of such revenue to local government, just behind property and sales taxes. In general, more than half of city and county general funds go toward safety and health care programs.

The 1986 voter-approved Proposition 47 provided for VLF revenues to be used by local governments. During a much healthier economic climate in 1998, VLF payments by vehicle owners were reduced, and the state dipped into its own growing general fund to pay the difference in the fee. The amount the state paid was termed the "VLF backfill." The state also promised in 1998 that the VLF payment made by individuals would be restored to its original amount if the state could no longer afford to pay the backfill.

Gov. Davis' recent recommendation to shift $4.2 billion in VLF backfill funds away from local government over the next 1¹/2 years to fund other state programs is a "raid" that "is neither equitable nor fair. No state program or department has been asked to shoulder such a disproportionate share of the budget pain," states a general letter signed by government leaders in Los Gatos, Saratoga and other cities that has been forwarded to the state Legislature.

According to City Manager Dave Anderson, as of Jan. 22, the governor's proposed budget would result in the city of Saratoga losing $589,000 this fiscal year and $1.2 million in the 2003-04 fiscal year. The loss of over a half-million dollars this year would reduce the city's general fund by 6.7 percent, and the fund would decrease by 14.4 percent next fiscal year, said Jesse Baloca, director of administrative services.

"How we will deal with this is through a combination of cross cutting and prudent use of reserves," Anderson said. The city will consider areas in the budget where reduction would create the least impact to services and the use of onetime funds to try to balance the budget.

Last year, the council established a $1.5 million economic uncertainty fund in anticipation that the state would experience a fiscal crisis soon, Anderson said.

A midyear budget report will be before the city council at its Feb. 5 meeting. Also, council members from around the peninsula will meet with Sen. Byron Sher, Assemblywoman Rebecca Cohn and other state representatives throughout the day on Jan. 31 to discuss the issue.

Citizens who support VLF revenues for local governments should write to their representatives in the state Legislature. For Saratoga, those representatives are Bruce McPherson, Byron Sher, Rebecca Cohn and Joe Simitian. Contact information is available at www.ca.gov under the "Government" link.