Passed in June 2011, SB 89 eliminated the collection of Vehicle License Fees (VLF) by cities. VLF funds previously accounted for a large portion of many municipalities’ general fund revenues.
SB 89 has wreaked havoc on the young City of Jurupa Valley, which was incorporated in March 0f 2011—just months before the Legislature eliminated the VLF funds. According to their report, SB 89 single-handedly caused the city to lose 47% of its first year revenues.
The following video, paid for by a private group, features many of Jurupa Valley’s civic leaders. They discuss the grave outlook for the city of nearly 100,000 nestled in Riverside County and pleads the CA Legislature to act before the city finds itself completely insolvent and unworkable.
This is Jurupa Valley California. Nearly 100,000 people call it home. It is the newest City in California yet its own roots predates California becoming the nation’s 31st State. Rich in its diversity and multi-cultural heritage, Jurupa Valley is known as a “Community of Communities.”
This richness is reflected in the faces of Jurupa Valley. Young families, children senior citizens and equestrians alike all reside here. They learn in its schools and libraries. They enjoy its parks, golf courses, trails and community museums. They honor the community’s veterans.
Home to beautiful vistas, modern transit systems, active park lands, regional centers of commerce and its own historic airport, Jurupa Valley is a microcosm of California itself.
Jurupa Valley just turned two. Its next birthday, may be its last.
It would have the shortest life of any city in the state’s 162 year history. And it is all because of the State and the passage of Senate Bill 89 in June 2011. It caused the loss of 47% of the City’s first year revenues. From its second year on, the City stands to lose approximately 35% of its fair share of revenue each and every year thereafter.
If there is not a legislative solution to rectify the effect of SB 89, the City will be insolvent by the middle of 2015. This is a fiscal crisis created by the State and not by any decision made by the City or its constituents.
The passage of SB 89 created a fiscal inequity between cities: Those that incorporated before the passage of Proposition 1A in 2004 and those that incorporated afterwards.
Those that were incorporated prior to Proposition 1A receive an additional appropriation of property tax “In Lieu of Motor Vehicle Licensing Fees.” Those that incorporated afterwards do not receive these same monies.
In 2006, realizing the inequity caused by Proposition 1A, then Governor Arnold Schwarzenegger signed into law Assembly Bill (AB) 1602. This attempt at parity granted newly incorporated cities an enhanced amount of MVLF as an offset to the property tax not realized by other cities due to provisions of Proposition 1A.
It was in reliance of the provisions of AB 1602 that made the incorporations of Jurupa Valley, Eastvale, Menifee and Wildomar fiscally feasible.
Senate Bill (SB) 89 eliminated in its entirety the distribution of MVLF to all cities and in effect overturned the provisions of AB 1602. The rules changed after the fact: After the approval of fiscal feasibility studies, after affirmation of the voters and after major expenses were already incurred.
In 2006, AB1602 was signed into law providing new cities with a replacement source of revenue — not from property tax like other cities — but from the remaining Vehicle License Fees allocated among cities.
In 2011, SB89 diverted these revenues to pay for law enforcement grants previously paid by the state general fund. The loss of AB1602 allocations to the four incorporating cities due to SB89 was approximately $16 million a year.
There is a solution. State bill 56 expands the existing MVLF/Property Tax formula enjoyed by every other city in the State to its four newest municipalities. It facilitates a fair and equal distribution of taxes to all cities in California. Its passage rights the “Wrong” created by SB 89. It ensures revenue parity between all cities.
Jurupa Valley is actively facing its fiscal dilemma. It has met multiple times with the Governor’s staff, the State Department of Finance and members of the Legislature. Last year the genesis of these efforts was the creation of Senate Bill 1566. Co-Authored by Senators Gloria Negrete Mcleod and Bill Emmerson this bipartisan supported legislation would reinstate the provisions of AB 1602. It was overwhelmingly passed in both houses of the State Legislature only to be vetoed by the Governor.
This year it is a new effort in the form of SB 56. If this legislative effort fails the City of Jurupa City of Jurupa Valley and all newly formed cities are facing various degrees of forced insolvency. For Jurupa Valley, it will mean the filing of a petition with the Riverside County Local Agency Formation Commission to disincorporate. No City has disincorporated under current law and no City has disincorporated since 1973. In order to meet legal requirements, this filing needs to occur by December 2013. Time is of the essence to save the city of Jurupa Valley.
The passage of SB 56 is about fairness and parity between all cities. It is about home rule and it is about the preservation of public safety.
At a minimum the publics’ safety in these four cities may be critically compromised as there will be no offsetting revenue available to the County of Riverside and it would have to reassume direct responsibility for law enforcement.