Saratoga News
News
Governor signs on dotted line, so it's official--cities get cash
By Jason Sweeney
Gov. Arnold Schwarzenegger signed it, so now it's official. Four local cities are set to get some extra cash.
The signing of Assembly Bill 117 on Sept. 21 means Saratoga, Monte Sereno, Cupertino and Los Altos Hills will receive about $4 million a year that had been previously allocated to Santa Clara County.
"Instead of us getting 4 1/2 percent of our property taxes, we'll now get 7 percent," Saratoga Councilwoman Kathleen King said. King worked with consultants and with representatives of the four cities to get the bill passed.
"In essence, we raised our general fund by 8 to 10 percent without any tax effect to our citizens," she said.
The money comes from tax equity allocation funding the four cities had been required to give to the county. Monte Sereno, Saratoga, Cupertino and Los Altos Hills have been receiving a lower percentage of their property taxes than all other cities in the state. In the wake of the passage of Proposition 13 in 1978, California cities with low or no property tax rates were left unable to raise their rates. A tax equity allocation formula was then passed to rectify this situation. The TEA formula shifted a percentage of property tax revenues from counties to cities with low or no property taxes.
However, in 1989 Monte Sereno, Saratoga, Cupertino and Los Altos Hills made a deal that allowed Santa Clara County to allocate only 55 percent of the TEA funding the cities would be otherwise qualified to receive. The deal was made to provide funding for trial courts, but other funding for the courts later came through. The county continued taking TEA funding from the cities despite attempts to get it back.
But with the approval of AB117, the four cities will get that money back, possibly starting in January.
Monte Sereno City Councilman Curtis Wright estimates his city will receive an extra $300,000 a year. Wright has worked for 2 1/2 years with representatives of the four cities to press the issue to the Santa Clara County Board of Supervisors, and then to the state legislature.
"There's a lot of things we could do, but we have to be very careful to allocate the money wisely," Wright said. "We're not going to go out and change our conservative philosophy just because we got this extra money. We anticipate the cost of fire, police and a lot of the services we pay for are going to be going up. We still have to watch every penny. But after 2 1/2 years, it feels pretty good."
After failures over the years by the four cities to retrieve the TEA funds from the county, Saratoga Mayor Norman Kline believed the political situation had become favorable enough to give it another shot. He worked with Cupertino Mayor Richard Lowenthal and Cupertino Councilwoman Dolly Sandoval to get the ball rolling.
The four cities brought the issue before the Santa Clara County Board of Supervisors, which voted to return the funding to the cities last February. In exchange, the cities agreed to annex urban pockets from the county and take over certain services the county currently provides.
The approval by the supervisors sent the issue to the state legislature in the form of Assembly Bill 117, written by Assemblywoman Rebecca Cohn.
In August, the bill remained in suspense, and the possibility arose it would not be passed by the legislature for at least another year, if at all. Representatives from the four cities began calling everyone they knew to push the bill forward. They contacted state senators Abel Maldonado, Elaine Alquist and Joe Simitian; assembly members Ira Ruskin, Sally Lieber and Joe Coto; and even Oakland Mayor Jerry Brown and California Secretary of State Bruce McPherson. "All our local representatives jumped on it--Democrats and Republicans," King said. "They all ganged together to get it out of suspense."
Concerns at the state level that passage of the bill would lower the educational-revenue augmentation funds the cities send to the state almost had the bill dead in the water, Kline said. But a compromise that kept the bill revenue-neutral to the state allowed it to go forward. That meant a little less money for the cities, but Kline said, "Without making that compromise, this bill would have never seen the light of day."
The bill was passed unanimously by both houses of the legislature on Aug. 30. Kline credits Cohn for getting the bill to the Legislature floor. "Rebecca did a great job," he said "This was simply her fighting like heck for what is fair."
"It's something that I've been concerned about for a long time, having been a resident of Los Gatos and Saratoga," Cohn said. "Since I've been in office, we've had very tough budget times. Because of budget shortfalls, our smaller cities have really suffered. They've had to cut services and vital staff, including law enforcement. It was fundamentally unfair.
"Come January, there's going to be more money in those cities' coffers. This means there's more money for services and staff that got cut during the bad budget times. It was very special to me that my very last bill as a member of the California Legislature is one that will have such a direct positive impact on some of the cities that I've had the opportunity to represent."
