June 18, 2013

Restore startup funding for new cities, annexations

By The Press-Enterprise Editorial Board | The Press-Enterprise

The state derives no public benefit from depriving communities of the power of self-determination. Legislators should approve a bill that would restore funding for incorporating new cities and annexing populated county areas into existing cities. The state should not hold decisions about local governance hostage to a misguided policy decision from two years ago.

SB 56, by Sens. Richard Roth, D-Riverside, and Bill Emmerson, R-Redlands, faces a committee hearing today. The bill would provide money for future incorporations and annexations, replacing dollars that disappeared when the Legislature in 2011 shifted $153 million in local funds away from cities to pay for new law enforcement grants. SB 56 would also help replace startup money for the state’s four newest cities, all in Riverside County, which saw promised tax receipts vanish in the funding shift.

The 2011 legislation redirected vehicle license fees, a revenue source dedicated by law to local government, away from cities’ general funds and into the new grant program. Every California city lost some money, but the shift hit new cities in Riverside County especially hard. State law previously had provided newly incorporated cities with an additional share of license fee dollars for five years to help with startup costs. Eastvale, Jurupa Valley, Menifee and Wildomar all incorporated based on that premise, only to see the state yank the money away from them. Jurupa Valley, for example, lost $6.7 million last year and $6.5 million in the current fiscal year — a serious blow to a city whose general fund budget is about $18 million this year. Wildomar, which has a $6.8 million general fund budget, lost $1.6 million this year.

The funding shift also made future incorporations nearly impossible financially. And the change deprived cities of money for providing services to newly acquired territory, making the annexation of already populated areas fiscally infeasible.

Yet there is no credible public goal in limiting the formation of new cities and the expansion of existing ones. State financial actions that block communities from becoming or joining cities achieve nothing beyond obstructing local self-determination. The state has no place offhandedly interfering with one on of the most basic civic choices residents face: whether to be under county or city government.

SB 56 would allocate a share of local property taxes to new cities and annexations to replace the lost vehicle license fee money — an arrangement common to cities that incorporated before a complex 2004 state funding shift. That proposal faces some opposition because the state would have to make up for any drop in property taxes that would otherwise go to schools. But the state already grabbed the vehicle license fee money that previously paid for new cities and annexations, and those funds are no longer available. Besides, the Legislature, not local government, created this mess — and so the state is responsible for cleaning it up.

The state already has a precedent for such action: Legislators made a similar fix in 2006 after the complex 2004 funding changes erased money for new cities and annexations. They should do so again. Stifling annexations and incorporations is mindless policy for California, and legislators should not tolerate it.


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