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Bay Area's Third Largest Chamber of Commerce Opposes State "Take Away" of Local Revenues

REDWOOD CITY, CA - January 28, 2003 - The Board of Directors of the Redwood City/San Mateo County Chamber or Commerce has taken an official position opposing Governor Davis' proposed 'take away' of local revenues. The Governor's proposed budget includes massive cuts in local revenues, which could severely inhibit cities' and counties' ability to provide necessary services to their citizens.

In a letter sent to Governor Davis by the Chamber's Board of Directors, the Chamber denounced the Governor's proposal to eliminate the Vehicle License Fee (VLF) "backfill," a reimbursement to local governments of funds they no longer receive due to a reduction in the VLF. This loss would be devastating to many local governments. Redwood City alone would suffer a loss of $1.5 million this fiscal year, and an estimated $3.3 million next year, followed by commensurate losses on a permanent basis. Other cities will suffer similar losses, despite a promise made by the legislature that the VLF would be fully restored, with funds going to local governments, in the event that the economy prevents the State from making those reimbursements. Throughout the State, the loss of VLF 'backfill' will amount to over $4 billion annually, threatening funding for basic city and county services like public safety, health and human services, and parks and recreation.

"The Governor's VLF proposal is short-sighted and unfair to local governments," said Larry Buckmaster, President & CEO of the Redwood City/San Mateo County Chamber of Commerce. "It adds insult to injury because this $4 billion is on top of the over-$5 billion the State already takes away from local governments from the property tax shift of the early 1990s. The fact is, cities and counties are subsidizing the State at the expense of the services our communities need. From a business perspective, this is very bad news and will have a long-term negative effect from which local economies may never recover."

Other aspects of the Governor's proposal also hit local governments very hard, including losses of redevelopment agency funds, loss of reimbursement of booking fees, and loss of road repair funds. The Chamber of Commerce recognizes that these reductions in local revenues are bad for their members, and are forcing local governments to shoulder a disproportionate share of the budget 'pain'.

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