Resolution 2003-06
RESOLUTION NO. 2003-06
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GILROY URGING
THE CALIFORNIA LEGISLATURE TO REJECT THE GOVERNOR'S PROPOSED
SHIFT OF LOCAL VLF REVENUES AND TO HONOR THE 1998 COMMITMENT
TO RESTORE THE VLF
WHEREAS, prior to 1935, cities and counties collected property taxes on motor vehicles
to fund essential local public health and safety services; and
WHEREAS, in 1935, the Legislature first enacted the Vehicle License Fee (VLF) Act,
replacing the property tax on vehicles with a 1.75 percent fee charged against the value of the
motor vehicle; and
WHEREAS, in 1948, the rate of the VLF was increased to 2 percent of the value of the
vehicle; and
WHEREAS, in 1986, the voters voted overwhehningly to constitutionally dedicate the
proceeds of the VLF to fund city and county services; and
WHEREAS, in 1998, a period of strong economic growth, the Legislature approved the
use of a portion of the rapidly growing state General Fund to reduce the VLF payments of vehicle
owners. This amount, known as the "offset", grew in future years to a 67.5 percent offset against
the amount owed. The amount paid to local governments in lieu of the reduced VLF payment is
known as the "VLF backfill"; and
WHEREAS, the 1998 legislation and subsequent enactments contain clear provisions that
when insufficient funds are available to be transferred from the General Fund to fully fund the
offsets and backfill amount that the VLF offset shall be reduced and VLF payments increased; and
WHEREAS, VLF and backfill revenues constitute approximately 10% of City of Gilroy
revenues. In Gilroy over 75% of city general fund spending go to front line law enforcement, fire
and emergency medical services.
WHEREAS, revenues derived from the VLF and backfill are of critical importance in
funding vital Gilroy safety services; and
WHEREAS, any failure by the Legislature to maintain the VLF backfill or restore the VLF
will cause widespread disruption in local government services essential to the well-being of Gilroy
citizens; and
RESOLUTION NO. 2003-06
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WHEREAS, Governor Davis' proposal to divert $4 billion in local VLF backfill payments
over the next 17 months fails to honor the 1998 commitment and is a direct assault on local
services that will be felt by every California resident; and
WHEREAS, shifting $4.2 billion in locally controlled revenues for local services is neither
equitable nor fair. No state program or department has been asked to shoulder such a
disproportionate share of the budget pain. These cuts come on top of the nearly $5 billion each
year that is transferred from local services to fund state obligations.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY OF GILROY, CALIFORNIA,
that if the state General Fund can no longer afford the expense of part or all of the VLF "backfill"
that the Legislature and Governor of California are hereby respectfully urged to implement the
provisions of current law providing for the reduction of the VLF offset in bad economic times and
to restore the VLF in an amount necessary to reduce the VLF backfill; and
BE IT FURTHER RESOLVED that the City of Gilroy hereby expresses its profound
appreciation to the legislators who support such VLF restoration legislation.
PASSED AND ADOPTED this 21st day ofJanuary, 2003 by the following vote:
AYES:
COUNCILMEMBERS: ARELLANO, DILLON, GARlMAN, MORALES,
PINHEIRO, VELASCO, and SPRINGER
NOES:
COUNCILMEMBERS: NONE
ABSENT: COUNCILMEMBERS: NONE
APPROVED:
-/Z
Thomas W. Sprin
ATTEST:
onda Pellin, City Clerk
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I, RHONDA PELLIN, City Clerk of the City of Gilroy, do hereby certity that the attached
Resolution No. 2003-06 is an original resolution, duly adopted by the Council of the City of
Gilroy at a regular meeting of said Council held on the 21st day of January, 2003, at which
meeting a quorum was present.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Official Seal of
the City of Gilroy this 23rd day of January, 2003.
(Seal)