R 3250
RESOLUTION NO. 3250
RESOLUTION BY THE CITY COUNCIL OF THE CITY OF
ARROYO GRANDE SUPPORTING A CONSTITUTIONAL
INITIATIVE TO ALLOW A VOTER OPTION FOR REDISTRIBUTION
OF SALES TAX TO LOCAL GOVERNMENT
WHEREAS, cities only receive 12% of the statewide property taxes paid, only 13.8% of
the statewide sales taxes, and no income taxes; and,
WHEREAS, most cities have significant service obligations in the areas of public safety,
infrastructure maintenance, parks maintenance, ~pital improvements, building code
enforcement, and library services; and,
, WHEREAS, taxpayers have demanded that government be held accountable, control
government spending, and that taxpayers get a return on their tax dollar investment in
the form of local services; and,
WHEREAS, the current distribution of taxes threatens the provision of services provided
by local government and has led to a concern amongst taxpayers as to where their tax
dollars are going; and,
.. WHEREAS, in 1996 and 1997, approximately 300 cities supported legislation to
redistribute one percent of sales taxes from the state to cities and counties to respond
to the aforementioned problems and concerns; and,
WHEREAS, the State Legislature did not pass the proposed legislation and in so doing
denied both cities and counties the opportunity to establish a permanent and
dependable revenue source out of existing tax dollars; and,
WHEREAS, by not passing the proposed legislation this last year, the State legislature
denied voters of the option to redistribute revenue from the state to local government to
meet local service needs as may be desired by local taxpayers.
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Arroyo
Grande does hereby support the Constitutional Initiative entitled "Voter Option to
Redistribute Taxes to Local Government Acf' as introduced to the Attorney General's
Office by the California Caucus for Cities and Schools.
On motion of Council Member Lady I seconded by Council Member Runels I
and on the following roll call vote, to wit ..-
AYES: Council Members Lady, Runels,Tolley, and Mayor Dougall
NOES: None
- . ABSENT: Council Member Fuller
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Resolution No. 3250
The foregoing Resolution was passed and adopted this 26thday of August ,1997. [
r
ATTEST:
/J . u.~
NANC~S, CITY CLERK
APPROVED AS TO FORM:
~-X ~ -? r""
TIMOjT Y J. CARM~TY ATTORNEY ;.
APPROVED AS TO CONTENT: &..' .
-Ko lr-a L . ftu.u 1 "
ROBERT L HUNT, CITY MANAGER
I, NANCY A. DAVIS, City Clerk of the City of Arroyo Grande, County of San Luis
Obispo, State of California, do hereby certify under penalty of perjury that #1e foregoing
Resolution No. 3250 is a true, full, and correct copy of said Resolution;passed and
adopted at a regular meeting of said Council on the 26th day of August, 1997.
WITNESS my hand the Seal of the City of Arroyo Grande affixed this 26th day of r
August ,1997.
'f1~a.~ !
.~ t...
NANCY ADS, CITY CLERK
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INITIATIVE MEASURE TO BE SUBMIt Hill DIRECTI.. Y TO
THE VOTERS
The Anomey General of California has prepaied the fono~ title arid S1h..h~ry
of the chief purpose and points of the proposed measure: .
(Here set forth the title and 5IIn1Tm1j' prepared by the Attorney General This title
and snmmary must also be printed across the top of each page of the petition whereon
signatures are to appear.)
.
TO THE HONORABLE SECRETARY OF STATE OF CALIEORNIA
We. the undersigned, registered, qualified voters ofCalifomia, resident~ of San Luis
County hereby propose amendments to the Constitution of
California,. relating to local government finance and petition the Secretary of State to
submit the same to the voters of-California for their adoption or rejection at the next
succeeding general election or at any special statewide election held prior to that general
election or otherwise provided by law. The proposed constitutional amertdments (full title
and text of the measure) read as follows:
SECTION 1. This act is known and may be cited as the "Voter Option To
Redistribute Taxes To Local Government Act."
SEC.2. The People J:1ereby:find and declare all of the following:
(a) Local voters should be given the option of establishing a perm~nent and
dependable source of revenue for essential services, incb]ding police., sherit1S, ~ district
attorneys, corrections, public infrastructure. libraries and parks. .
(b) Local governments have a responsibility fur providing an adequate level of
essential services and taxpayers have demanded accountability, control of government
spending, and a return on their tax dollars.
(c) Local gOveITlments do not receive an adequate share of existing general fund
tax revenues and the CUITent distribution of these revenues has resulted in a fimding crisis
in many commnnities that threatens the provision of essential services dem~nded by the
public.
(d) Local voters deserve the opportunity to detennine the public service needs of
their commui:tities and the potential of meeting those needs with existing tax dolJars,
including the manner in which tax revenues are distributed..
SECTION 3. Article XIII E is added to the California Constitution, to read:
ARTICLE XIII E
SECI10N 1. The governing body of any city, city and county, or cOUDty may, by
the adoption of an ordinance approved by two-thirds ofits entire membership, propose to
the voters of that ~ity, city and county, or county redistribution ofsa1es and.use taxes
through a reductio~ in the state sales and use tax and the imposition of a local sales and
use tax. . Any ordinance approved pursuant to this section shall be submitted to the voters
in accordance with Section 4.
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SEC. 2. The sales tax portion of any ordinance adopted pursuant to this article
shall be imposed for the privilege of selling tangible personal property at retail, aud shall
include provisions in substance as follows:
(a) (1) A provision imposing a tax for the privilege of selling tangiblC j:Jersonal
property at retail upon every retailer in the city, city and county, or uniricorporated area of
the county at one of two rates specified in paragraph (2) on the gross receipts of the
retailer nom the sale of tangible personal property sold by that person at retail in the city,
city and county, or unincorporated area of the county.
(2) For purposes of paragraph (1), the tax rate shall be either of the following:
(A) Two tenths of 1 percent fur the :first year in which the ordinance is opc:ra$e,
and shall be increased by. an additional.20 percent rate for each suN"Pflltiing year until the
tax rate equa1s.1 percent for the fifth year and each year thereafter in which the ontinaD.ce
is operativE.
(B) One tenth of one percent for the first year in which the ordin~nt".P. is operative,
and shall be increased by an additional.l 0 percent rate for each ~ing year until the
tax rate equa1s .50 percent in the fifth year and each year thereafter in which the ordinanc".p.
is operative.
(b) A provision stating that the rate of tax specified in subdivision (a) is equal to
the rate reduction required in the levying jurisdiction by subdivision (a) of Section 6.
(c) Provisions identical to those coutainP.rl in the Sales and Use Tax Law, or its
successor, insofar as they reJate to sales tax, except that the name of the city, city and
county, or county as the taxing agency shall be substituted fur that of the state (but the
name of the city, city and county, or county shall not be substituted for the word "state" in
the phrase "retailer engaged in business in this state" as used in the Sales and Use Tax
Law, or its successor, nor in the definition of that phrase in the Sa1es~d Use Tax Law, or
its successor) and an additional seller's permit shall not be required if one bas been.or is
issued to the seller pursuant to the Sales and Use Tax Law, or its successor.
(d) A provision that all amen~!3 subsequent to the effective date of the
enactment of the Sales and Use TaX Law, or its successor, and not inconsistem: with this
artic~ shall automatically become a part of the orrlirnmce of the city, city and county, or
county.
(e) A provision that all exemptions applicable to the sales tax rate imposed
pursuant to the Sales and Use Tax Law, or its sucCessor, are applicable to the sales tax
rate imposed by the ordinance.
. (f) A Provision that the city, city and county, or county shaD., prior to the effective
date of the sales and use tax ordinance, contract with the State Board of Equalization to
perform all functions incident to the administration or operatiQn of the sales and use tax
ordin~nce of the city, city and county, or county. Any contract as so described shall
continue in effect for as long as the city, city and county, or county bas an operative sales
and use tax ordinance enacted pursuant to this article. .
(g) A provision that the amount subject to tax shall not include the amount of any
sales or use tax imposed by the State ofCalifomia upon a retailer or consumer.
SEC. 3. The use tax portion of any sales and use tax ordinance adopted pmsuant
to this article shall impose a complemf"Jrtmy tax upon the storage, use, or other
consumption in the city, city and county, or county of tangible personal property
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purchased from any retail~ for storage, use, or other consumption in the city, city and
county, or county. The rate of this use tax shall be identical to the applicable sales tax rate .
specified by the sales tax portion of the orrlinm1t'i'!_ The use tax J'Ortion of ~ ordiDance
shall include all of the fonowing: . .
(a) A FOvision stating that the rate of the tax is equal to the rate reduction
required in the levying jurisdiction by subdivision (b) of Section 6.
(b) Provisions identical to those conraTrted in the SaJesand Use Tax Law, or its
successor, insofur as they relate to use tax, except that the name of the city, city and
county, or county as the taxing agency shall be substituted for that of the. state (but the
name of the city, city and county, or county shall not be substituted for the word "state" in
the phrase "retailer engaged in business in this ~" as used in. the Sales and Use Tax
Law, or its successor, nor in the definition oftbat phrase in the Sales and Use Tax Law, or
its suc~assor) and an additic=1 :;e!!cr'3 permit shall net ~ ~uir\:d if one has been or is
issued to the sener pursuant to the Sales and Use Tax Law, or its successor.
(c) A provision that all amenrlmenr~ subsequent to the effective date of the
enactment of the Sales and Use Tax Law, or its successor, relating to use tax and not
inconsistent with this article, shall automatically become a part of the orrlin~nce of the city,
city and county, or county.
(d) A provision that an exemptions appJicable to the use tax rate imposed pursuant
to the Sales and Use Tax Law, or its successor, are applicable to the use tax imposed by
the ordinance.
(e) A provision that the storage, use, or other consumption of tangible personal
property, the gross receipts from the sale of which have been subject to sales tax under a
sales and use tax ordinance enacted in accordance with this article by a city, city and
county, or county, shall be exempt ftom the use tax imposed by the ordinance.
(f) A provision that the amount subject to tax shall not include the amoUl1t.of any
sales or use tax imposed by the State of California upon a retailer or consumer.
SEC. 4. No ordinance adopted pursuant to this article shall be effective unless that
ordinance is submitted to the electOrate of the adopting city, city and county, or county
and is approved by a majority of the votes cast on the issue. For purposes of the
preceding sentence, "the electorate of an adopting county" means only those voters in the
unincorporated area of that county. Arrj election conducted pursuant to this section shall
be held as a regular or special election not less than 88 days after the adoption of the
subject ordinance. Any ordinance that becomes effective in accordance with this section
shr'lll become 'operative COTT1TT1e11cmg on the first day of the first calendar quarter
commencing more than 90 days after the date upon which the election results with respect
to that ordinance are certified.
SEC. 5. Any sales and use tax ordinance that is operative pursuant to this article
with respect to a county shall be inoperative within the boundaries of any city located in
that county.
SEC. 6. (a) (1) In any city, city and county, or coumythat elects to impose a tax
rate pursuant to Section 1, the rate of sales taX imposed by the state pursuant to the Sales
and Use Tax Law. or its successor. which generates general fund revenue for the stat~
shall be reduced by that rate of tax imposed by the electing agency pursuant to that
section. Any rate reduction made pursuant to this section in the rate of tax imposed
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pursuant to Sales and Use Tax Law, or its succe~ shall be operative commencing with
the first caJ~d~ quarter COrrtrnencing more than 90 days after the date upon which the
approval by the voters of a tax rate to be imposed pursuant to Section 1 is ~
(2) No tax rate reduction made pursuant to paragraph (1) shall result in any.
reduction in the amount of the state's funding obligation to schools pursuant to Section 8
of Article XVI: If, with respect to any fiscal year, the Departmem ofFmance, or a
successor department, determines that the state caDDOt fulfill its funding obligations
pursuant to Section 8 of Article XVI as a ~ ofm rate reductions made pursuant to
this subdivisio~ it shall be the responsibility of the state to comply with Section 8 of
Article XVI in an TMnner that does not .
(A) Affect amounts of revenue otherwise aDocatecho or received by cities, cities
and counties, or counties from state and meal taxes, fees and a.~P.IltS, including the
growth in lb.ese revenue sources.
(B) Affect distribution methods used to allocate state and local taxes, fees and
assessments, including the growth in these revenue sources, to and amongst cities, cities
and counties, and/or counties.
(C) Result in any shift of state service or program obligation to cities, cities and
counties, or counties.
(D) Result in any redistribution of service or program obligations amongst cities,
cities and counties, and/or counties.
(b) (1) In any city, city and coumy, or coumytbat elects to impose a tax rate
pursuant to Section 1, the rate of state use tax imposed by the state pursuant to the Sales
and Use Tax Law, or its successor, that generates general fund revenue for the state, shall
be reduced by that rate of tax imposed by the electing agency pmsuant to that section.
Any rate reduction made pursuant to this subdivision in the rate of tax imposed pursuant
to Sales and Use Tax Law, or its successor, shall be o~cU:ive commencing with the first
calendar quarter commencing more than 90 days after the date upon which the approval
by the voters of a tax rate to be imposed pursuant to Section 1 is certified.
(2) No tax rate reduction made purswmt to paragraph (1) shall result in any
reduction in the amount of the state's funding obligation to schools pursuant to Section 8
of Article XVI. If, with respect to any fiscal year, the Department of Finance, or a
successor department, determines that the state caDDOt fulfill its funding obligations
pursuant to Section 8 of Article XVI as a result of tax rate reductions made pursuant to
this subdivisio~ it shall be the responsibility of the state to comply with Section 8 of
Article XVI m an manner that does not
(A) Affect amounts of revenue otherwise aDocated to or received by cities, cities
and counties, or counties from state and loeal taxes, fees and as.~s, including the
growth in these revenue sources.
(B) Affect distribution methods used to allocate state and local taxes, fees and
assessments, including the growth in these revenue sources, to and amongst cities, cities
and counties, and/or counties.
(C) Result in any shift of state service or program obligation to cities, cities and
counties, or counties.
(D) Result in any redistribution of service or program obligations amongst cities,
cities and counties, and/or counties.
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SEC. 7. (a)(l) Notwithstanding any other provision of Jaw, including the
provisions of this constitution, the state sales tax rate imposed pursuant to Sales and Use
Tax Law, or its successor, sba.ll be at least 4.75 percent, unless this rate is ~ by any
city, city and county, or county pursuant to this article. '.
(2) Notwithstanding any other provision of Jaw, including the provisions 'oftbis
constitution, the proceeds ftom the state sales tax rate specified in paragraph (1) shall be
considered general fund revenue of the state.
(b) (H Notwithstanding any other provision of Jaw, incIudiog the provisions of .
this constitution, the state use tax rate imposed pursuant to Sales and Use Tax LaW., or its
successor, sba.ll be at a rate of at least 4.7:J percent, unless this rate is mb1ced by any city,
city and county, or county pursuant to this article.
(2) Notwithstanding any other provision of law, including the provisionS of this
constitution, the proc...oeds ft-c- .1.. .....at'" ...-. tax Iate _.......:.c...,.J :.. _grapL. In ~n be
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considered general fimd revenue of the state.
SEC. 8. (a) Notwithstanding any other provision of this constitution, including,
but not limited to, Section 29 of Article XIII and Section 6 of Article XV4 the State
Board ofEqnalmlrion, or a successor board, after deducting an amount equal to its actual
and reasonable costs incurred in making the allocations, shall allocate the ren1ainil~
amount of revenues collected pursuant to taxes imposed under this article on a equivalent
per capita basis, as provided in subdivision (b).
(b) For purposes of this section, "equivalent per capita basis" means both of the
following:
(1) In the case of a city or city and coumy, the. proportion that the population of
each city, or city and county that imposes a tax pursuant to Section 1 bears to the total
population of all cities, cities and co~ and unincorporated areas of counties that have
imposed a tax pursuant to that section, as determine by the population resean:h unit of the
DePartment ofFmance, or a successor department of the state.
(2) In the case of a county, "'equivalent per capita basis" meaDS the proportion that
the population of the unincorporated area of a county that imposes a taX pursuant to
Section 1 bears to the total population of all cities, cities and counties, and tm1ncnrporated
areas of counties that have imposed a tax pursuant to that section, as detemDned by the
population research unit of the Department ofFmance, or a successor department of the
state.
(c) For purposes of subdivision (b), the popuIation of each city, city and county,
aDd county is'determined by the last federal dfl'Nl'ftnial or special census, or subsequent
census validated by the population research unit. of the DepartmeIJt ofFmance, or a
successor dep-d(twent. In the case of a city incorporated subsequem to the last federal
ce~ or a subsequent census validated by the population research unit, the popuJation
research unit of the Department ofFmance, or successor departmem, shall detemDne the
population of the city. In the case of unincorporated territory being annexed to a city
subsequent to the last federal c~ or a subsequem census validated by the population
research uni4 the population research unit shall detl!!'1Trine the population of the annexed
territory by the use of any federal decennial or special CCIJSUS. In the case of the
consolidation of one city with another subsequent to the last feder.i1 census, or a
subsequent census validated by the population research unit, the population of the
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consolidated city, for purposes of this section, is the aggregate population oftbe
respective cities as determined by the Jast federal census, or a sUbsequent census or
estimate vatidated by the popuJation research unit of the Department ofFnmnN"", or a
successor department.
(d) Any city, city and county, or county which imposes the lesser of the two tax
rates included in paragraph 2 of subdivision (a) of Section 2, shall be allocated an amount
equal to half the amount allocated to other cities, cities and counties, or counties which
impose the higher of the two tax.rates included in paragraph 2 of subdivision (a) of
Section 2.
SEC. 9. (a) Notwit1Jst:mding any other provision of this constitutio~ including
Section 6 of Article ~ any city, city and county, or county that imposes a tax rate
pursuant to this article may, in its discretion, allocate any portion of the revenue received
to any pubfi- ~1.......1 .::--:- ....r!th~1 ,..~ tb:::: =ves ~,,"r 1"P~tfpont of. that city city and
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county, or county. Any revenue allocated pmsuant to this section may be used for capital
expenditures or for ongoing expenses for a fixed period as set forth man ~
between any school district and city, city and county, or county.
(b) Any amount disnibuted to public schools pursuant to subdivision (a) shall not
be considered by the state in any pan of the state's :fhuding obligation to schools pursuant
to Section 8 of Article XVI.
SEC. 10. (a) Notwithstanding any other provision of Jaw, including any other
provision of this constitution, the sales and use tax rate imposed by any city, city and
county, county, or redevelopment agency pursuant to Bradley-BUms UnifoIDl Local Sales
and Use Tax Law, or its successor, including the "place of sale method" used to allocate
the proceeds ftom the rate imposed by any city; city and county, county, or redevelopment
agency pursuant to Bradley-Bums Uniform Local Sales and Use Tax Law, or its
successor, shall remain in full force in any city, city and county, or countY which adopts or
does not adopt tax redistribution pursuant to Section 1, and shall not be altered or reduced
by the LegisJature.
(b) For purposes of subdivision (a), "place of sale" means the allocation of
proceeds back to the city, city and county, county or redevelopment agency where the tax
is imposed and paid in direct proportion to the amount of tax paid.
SEC. 11. The portion of moneys allocated to each city, city and county, or
county pursuam to the V chicle License Fee Law, or its successor, shall not be reduced by
the Legislature.
SEC. "12. As used in this article, the word "city" means general Jaw cities and
charter cities.
SEC. 13. The provisions of this act shall be hDera.lly constrUed to e:ffectuate its
purpose of providing voters with the option to redistribute sales and use taXeS ftom the
state to local government and to have those revenues allocated on a per capita basis in
order to Slngment local govermnent~' existing revenues.
SEC. 14. Ifany provision of this act, or pan thereot: is for any reason held to be
invalid or unconstitutional, the remaining sections shall not be affected, but shall remain in
full force and effect, and to this end the provisions of this act are severable.
SEC. 15. Pursuant to subdivision (a) of Article II9 the provisions of this article
shall become effective the day after the election.
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