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Government Relations

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

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  1. Government Relations Shaping the Future The 2010 CMRTA Annual Conference Sacramento, California www.MuniServices.com

  2. 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

  3. 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

  4. 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

  5. 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

  6. 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

  7. 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

  8. 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

  9. 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

  10. 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

  11. 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

  12. 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

  13. 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

  14. 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

  15. 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

  16. 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

  17. Contact Fran Mancia, Director of Government Relations P: 800.800.8181 (5013) E: Fran.Mancia@MuniServices.com Brenda Narayan, Legislative Communications P: 800.800.8181 (5014) E: Brenda.Narayan@MuniServices.com 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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