A League of Their Own

The Orange County division of the California League of Cities has been engaged in a long-running battle over the diversion of property tax revenue to the state. That battle is heating up as the diverted pot grows in a healthy economy.

There are streets and potholes to fix, so finding an agreeable resolution is important. Unfortunately, instead of moving toward resolution, the distance between the city hall chambers and the corridors of the Legislature appears to be growing. It doesn’t have to be this way. The area’s state legislative delegation is a natural mediator to work in Sacramento to find more equitable ways of resolving these differences between colleagues and local officials.

Local officials complain that the legislative process hasn’t worked for them. So the alternative, now being explored, is to rely on two common strategies to get around a legislative impasse: the political action committee and the ballot initiative.

The latest round involves a battle over the state league’s current work to set up a political action committee, and efforts by Assemblyman Brett Granlund (R-Yucaipa) to scrap that effort. Granlund, a former city councilman himself, argues that the lobbying apparatus of the cities is already significant in Sacramento, and that turning organizations of cities into fund-raising entities will create conflicts of interest for city employees. He says urging local businesses to contribute to the causes of cities is fraught with minefields because local officials pass judgment on contracts.

Bev Perry, the city councilwoman from Brea who is Orange County division president, calls these arguments a red herring. She says local officials won’t lean on local businesses, and that city managers never would be asked to act against their code of ethics. The effort by a separate lobbying staff would be to build support statewide for a ballot initiative to restore funding initially intended for cities.

Clearly, it would be better for cities not to have to go the political action committee route. However, the arguments deserve to be heard and considered some way or another. A look at Orange County’s situation shows that the real issue is the underlying problem of how money gets distributed, and that won’t go away without some reconfiguration. The Legislature either can decide to take that issue on itself, or it can face the prospect of a ballot initiative, with all of the uncertainties and rigidity that route might bring to the process.

The history is important. In 1992-93, because of the state budget crisis, the Legislature looked to meet obligations to fund schools under Proposition 98. Because of the recession, the Legislature sought to avoid drastic general funds cuts by shifting property taxes that would have gone to local governments to meet the obligationfor state school funding. This has come home to counties like ours. The Orange County chapter of the League of Cities estimates it has lost $276 million that it otherwise would have received since that time. The result, according to the league, is reductions in recreation programs, street sweeping, road repairs and other services.

Cities need some flexibility in determining how they spend their money. While the county is working often to meet state mandates, some better revenue sharing formula would allow the cities room to make their own decisions on how to meet their needs. Local representatives in the Assembly should consider how they can serve as more effective mediators in closing this gap.

For the cities, the problem is aggravated by the knowledge that during good times the amount of money diverted from city needs to Sacramento is increasing. It would be one thing if the amount diverted were fixed, but it grates in the craw of cities that the amount going out of the county is more when property tax revenues are higher.

The recession is over, and there ought to be some way of getting the cities a better share, or at least to arrive at a formula for determining fixed amounts that will go to the state. Instead, the atmosphere is poisoned by a kind of bitterness that has grown up over Granlund’s bill, which would take aim at the state political action committee being planned by the cities. It would bar organizations that create new political action committees from receiving public money. The bill has a Senate hearing scheduled for this week, after passing the Assembly.

Rather than have this be a fight between legislators and cities, there ought to be a better way of addressing the longstanding questions over funding formulas.