Rebuilding California Requires Restoring Local Control of Local Revenues
by Chris McKenzie
Convening a meeting of 500 city, county and school elected and appointed officials to explore what should be done to get California’s state government back on track would have been considered unthinkable and unnecessary until recently. Local leaders have historically focused on the service needs of their respective jurisdictions and not on the challenges of the state as a whole. However, these are not ordinary times, and local officials know this all too well.
For far too many years we have witnessed our state leaders increasingly avoid our state’s most pressing problems, patching together annual budgets that soon unravel because state leaders refuse to make the tough revenue and spending decisions that local government leaders must make regularly. But this year the dysfunction in our state governance became painfully evident as the Legislature and governor adopted budget after budget that failed to meet the test of responsibility in the eyes of both the public and Wall Street.
Our current economic challenges demand elected leaders who will make the difficult decisions required to manage our limited resources, but many local officials have simply lost faith in the ability of their state government to do this. So 500 local officials came from throughout the state in mid-July to explore why the system has broken down and how it can be rebuilt.
In general sessions and small group break-out sessions, the local officials put their experience, hopes and creativity to work, exchanging ideas at the Local Government Summit on State Governance and Fiscal Reform, an event sponsored by the CCS (Cities, Counties and Schools) Partnership. In the end, some very simple themes emerged from these intense summit sessions, held July 17–18, 2009:
• The roles and responsibilities of state and local government need to be more clearly defined. Very little reform can be achieved until there is a clear understanding of the relative authority of local and state governments.
• Local governments need sovereignty on budget matters, including protection against unfunded state mandates and from the state borrowing local revenues. In order to ensure stable local budgets, uninterrupted services and the ability to plan and make decisions in the best interest of the community, local governments need predictable revenues. The current system prevents planning because local agencies are unable to rely on consistent future revenues and are responsible for complying with mandates from the state that are not funded and may not be the community’s priority. Local sovereignty would ensure that local officials have control over the decisions that impact their communities and are able to prioritize programs and services and align expenses with revenues.
• The state and local budget cycles should be aligned. Currently budget cycles are not aligned, and it means that local governments may pass a budget that becomes unfeasible when the state budget is passed.
• Local government is best suited to provide services for the community because it better reflects community values and is more accountable to the community than other levels of government. Local government decisions can be directly and explicitly linked to the revenues raised. Local officials are in positions to make decisions that reflect the community’s priorities and react quickly to community concerns or issues. In addition, local taxes and local services can be directly linked, creating transparency for the taxpayer and the ability to hold local officials accountable for their decisions.
The four top priorities that emerged from the summit are expected to guide the work of the League and other local government associations over the next few years. They are:
1. Protect local revenue sources (256 votes);
2. Reform term limits (111 votes);
3. Approve local taxes with less than a two-thirds vote (71 votes); and
4. Require new funding sources for statewide ballot measures that impose new obligations (66 votes).
Stay tuned as we reach out to city leadersto encourage them to collaborate with their county and school colleagues by holding local summits to discuss the importance of these priorities.