County and City Associations Announce VLF Backfill Litigation Coalition.

News Editors/Political Writers

SACRAMENTO, Calif.--(BUSINESS WIRE)--Dec. 17, 2003

The California State Association of Counties (CSAC) and the League of California Cities today announced that legal action to provide funding to replace lost Vehicle License Fee (VLF) revenue will be filed soon in Sacramento County. Further, they noted the formation of a litigation coalition of cities and counties to prepare and file a lawsuit to protect local services.

CSAC and the League are expected to join as plaintiffs in the lawsuit along with dozens of cities and counties from around the state.

"Counties and cities throughout the state are joining this coalition to prevent drastic cuts to local services," said Calaveras County Supervisor Paul Stein, President of CSAC. "The law clearly states that local governments must be protected. At the same time, we will continue to pursue a legislative solution. Local governments are losing $10 million every day while this issue goes unresolved."

"We have to look at all the options available to us to solve this funding crisis," said Ron Loveridge, Mayor of Riverside and President of the League. "We would prefer a legislative solution, but if the Legislature isn't prepared to act on this issue, we feel we have no choice but to ask the courts to uphold the law which requires payment of the VLF backfill."

Cities and counties statewide lost an estimated three-quarters of their vehicle license fee revenues this month as a result of Governor Schwarzenegger's decision to cut vehicle license fees and the Legislature's failure to appropriate funds to backfill local governments. The state constitution dedicates revenues from the fees to fund local services. In 1998, when the state first began reducing VLF payments, it promised it would pay for that expense and not pass the fiscal impact on to cities and counties. Legislators last Friday recessed for the holidays without acting on legislation to backfill cities and counties.

"We think the law is clear: Once the VLF payments have been reduced, the state has the legal responsibility to pay the backfill," said Steve Szalay, CSAC Executive Director.

"Our first goal is to work with the Legislature and the Governor to make sure the funds are restored. But if the Legislature fails to act, we have a responsibility to the people of California to ensure that critical local services are preserved."

"Counties and cities up and down the state have either acted or are expected to act shortly to join the coalition effort. The League and CSAC will invite every interested city and county to join. Many will probably be joining in the days ahead," said Chris McKenzie, League Executive Director. "They're all motivated by the same reality: we can't sustain these losses and maintain the public safety and other services the public has a right to expect."

To date, the following local governments have authorized participation in litigation to require payment of the VLF backfill:

Counties: Butte, Contra Costa, Fresno, Humboldt, Los Angeles, Madera, Orange, Riverside, Sacramento, San Benito, San Bernardino, San Diego, San Francisco, Santa Barbara, Santa Clara, Sonoma, Tulare, Tuolumne and Yolo.

Cities: Los Angeles, Sacramento and San Juan Bautista.