BILL ANALYSIS
AB 1339
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Date of Hearing: April 29, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 1339 (V. Manuel Perez) - As Introduced: February 27, 2009
Policy Committee: Local
GovernmentVote:7-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill addresses past misallocations of property taxes to the
Imperial County Free Library by deeming apportionments made from
2001-02 to 2006-07 to be correct and requiring that
apportionments made in 2007-08 to be made based on corrected
factors.
FISCAL EFFECT
The bill would forgive about $950,000 of past ERAF contributions
owed from the Imperial County free library to school districts.
Under Proposition 98, local property tax contributions offset GF
expenditures for schools on a dollar-for-dollar basis. Thus, the
impact of this bill is a loss of resources available to the GF
of $950,000.
COMMENTS
1)Background - ERAF . In 1992-93 and 1993-94, in response to
serious budgetary shortfalls, the Legislature and
administration permanently redirected over $3 billion of
property taxes from cities, counties, and special districts to
schools and community college districts. Under Proposition 98,
these redirected funds reduce the state's funding obligation
for K-14 school districts by a commensurate amount.
The property tax shift is accomplished through contributions
that cities, counties, and special districts (such as library
districts) deposit into the Education Revenue Augmentation
Fund (ERAF), the proceeds of which then are transferred to
school districts within the county. These contributions grow
AB 1339
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over time in line with the property tax growth rate in each
local jurisdiction. Property tax allocations and annual
contributions to ERAF are made by the county auditor.
2)Rationale . AB 1339 is sponsored by the County of Imperial to
rectify a local taxation problem. An audit by the State
Controller's Office determined that the county auditor
inadvertently left the library out of the ERAF contributions
made by local entities within the county. The county
indicates that the ERAF contribution is now being made and the
library is moving forward with a substantially smaller revenue
stream. The county asserts that relief for past
misallocations is needed because the library is a valuable
resource, and the relief will enable it to continue providing
literacy services to the area's residents.
3)Key fiscal question . Since this misallocation by the county
auditor is related to ERAF contributions, the full fiscal
impact of this bill will be borne by schools, and ultimately
the GF. The question that this bill poses is, given its dire
fiscal situation, should the state bear 100% of the cost
resulting from past misallocations by the county, or should
some or all of the cost be shared by the county and/or
library.
Analysis Prepared by : Brad Williams / APPR. / (916) 319-2081