Assistance to Local Government
State-Local Fiscal Relationship

With the passage of Proposition 1A in 2004, local governments have a more stable funding relationship with the state, which can no longer shift costs, fail to reimburse mandates on a timely basis, or reallocate local revenues to benefit state priorities.

Local governments also have benefited from the Vehicle License Fee (VLF) "swap," which allows them to retain additional property tax revenues to backfill the revenues they lost when the VLF was reduced from two percent to 0.65 percent. The backfill amount annually grows with the increase in secured roll property tax revenues, instead of the annual increase in VLF revenues. Because secured roll property tax revenues have increased significantly more than VLF revenues since 2004-05, we estimate the VLF swap has cumulatively allowed counties and cities to retain an additional $2.7 billion in property tax revenues that otherwise would have been directed to K-14 schools.
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CHAPTER HIGHLIGHTS for Assistance to Local Government Back to Top

 Proposed Budget-Balancing Reductions
image of black pointing arrowState-Local Fiscal Relationship
 Local Government Revenues
PRINTABLE BUDGET DOCUMENTS Back to Top
Budget Summary - Assistance to Local Government (pdf * - 42K) -
Provides this entire Assistance to Local Government Chapter in pdf format.