Governor Jerry Brown announced that he has signed SB 107, a comprehensive measure addressing fiscal relief measures for counties as well as guiding the final technical steps in the dissolution of redevelopment agencies. One critical fiscal relief provision includes a fix for what has come to be called the “negative bailout,” a complex tax calculation put in place as part of Proposition 13 clean up. As a result, several counties have been paying more in property taxes than they should have.

“I’m not sure I could explain exactly how or why the negative bailout happens,” said CSAC President and Stanislaus County Supervisor Vito Chiesa. “But it has been costing Stanislaus County more than $2 million a year for more than 30 years. Senate Bill 107 fixes this for Stanislaus County and also for, Lassen, Plumas and Trinity counties that have also been paying too much.”

“These counties can really use the additional revenue,” said CSAC Executive Director Matt Cate. “What Vito won’t tell you is that the negative bailout fix wouldn’t have happened without his leadership and hard work on the bill. And his strong working relationship with the Governor and Central Valley legislators didn’t hurt either.”

The bill also fixes several other local government funding issues:

  • Allows San Benito County to participate in an Educational Revenue Augmentation Fund (ERAF), and essentially forgives a nearly $4 million debt San Benito has owed for more than a decade.
  • Provides debt relief for California’s newest cities in Riverside County, that were disproportionately burdened with the loss of Vehicle License Fee (VLF) they expected when they were first formed, because of changes brought about in 2011 Realignment
  • Over a five-year period, ends the requirement for four cities in Santa Clara County to reimburse the county for its ERAF due to tax equity allocations would end upon passage of this provision.

“Counties were neutral on the majority of the redevelopment provisions that are the real focus of this bill,” said Cate. “Our focus was on the several components that are helping counties in different, but very real ways. We’ll call that a win.”

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Originally posted at California State Association of Counties.