Local control starts with protecting local revenues
We know all too well from the pandemic how important local control is for fiscal stability. Local leaders, as the officials closest to the people, are well positioned to make the best decisions for their residents — whether in times of economic boom or bust.
Fiscal certainty is critical to the sustainability of local services that residents rely upon. In the face of economic uncertainty and a growing state deficit, the League of California Cities is focused on pushing back against any proposals — whether from the Legislature, the state, the courts, or at the ballot box — that would disrupt this certainty.
That’s why safeguarding essential local revenues and supporting fiscal sustainability is one of Cal Cities’ advocacy priorities for 2023. Cal Cities is laser-focused on protecting, increasing, and improving local revenue streams, and will oppose any effort that would reduce or eliminate funding for cities.
Californian’s quality of life is directly impacted by local officials’ ability to deliver essential community services. Fixing potholes, responding to emergencies, keeping our parks clean, expanding broadband, and supporting unsheltered individuals — these are just some of the services we deliver to our residents. As city officials, we cannot serve our residents without a vigorous local economy that supports a robust tax base and generates municipal revenue.
A healthy, thriving local economy requires many components. Attracting new businesses while supporting existing ones, retaining employees, and providing opportunities for a skilled workforce, just to name a few. Even more foundational to a thriving economy is local decision-making and city officials’ authority to make financial decisions that meet the collective needs of their communities.
Our cities are resilient, strong, and innovative. But that doesn’t mean that the state can jeopardize local government finances to balance its own budget. Just last month, your Cal Cities Officers, Cal Cities Executive Director and CEO Carolyn Coleman, and I met with several members of the Legislature and the Governor’s Office to deliver this message.
During those meetings, we discussed the important role that cities play as the bedrock of California’s economy. We highlighted the fact that siphoning local revenues and weakening local governments’ fiscal conditions will only compound the financial challenges the state faces.
This includes the nearly $1 billion the state owes to local governments for nearly two decades worth of costs related to state mandates. Frequently, lawmakers and the Governor will approve new laws that local governments must carry out. If these new laws are state mandates, the state must pay local governments for implementing the law. To cut costs, the state has often suspended some of these programs and stopped offering reimbursements. This includes pending reimbursements to local governments that were carrying out the program before it was suspended, resulting in a reimbursement backlog to the tune of nearly $1 billion.
One example of a state-mandated program is crime statistic reporting for the California Department of Justice (DOJ). In 2001, the state began requiring local law enforcement entities to report to the DOJ a wide variety of demographic data regarding homicides, hate crimes, domestic violence calls, and firearms charges. This requirement was deemed a state mandate, but since the law was passed, the state has neglected to pay local governments more than $114 million in outstanding reimbursement claims. We expect the state to be a good-faith partner with cities to serve our collective communities, and that includes fiscal support.
A strong city budget and local authority are the secret ingredients for building strong, thriving communities. At Cal Cities, we’re ready to fight any challenge to these critical tools.