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RESOLUTION NO. 2003-020 <br /> <br />A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF <br />SANTA ANA URGING THE CALIFORNIA LEGISLATURE <br />TO REJECT THE GOVERNOR'S PROPOSED SHIFT OF <br />LOCAL VEHICLE LICENSE FEE ("VLF") REVENUES AND <br />TO HONOR THE STATE'S 1998 COMMITMENT TO <br />RESTORE THE VLF <br /> <br />bk:2/4/03 <br /> <br /> BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS <br />FOLLOWS: <br /> <br /> Section 1. The City Council of the City of Santa Ana hereby finds, determines <br />and declares as follows: <br /> <br />Prior to 1935, cities and counties collected property taxes on motor <br />vehicles to fund essential local public health and safety services. <br /> <br />In 1935, the Legislature first enacted the Vehicle License Fee ("VLF") Act, <br />replacing the property tax on vehicles with a one and ~ percent (1.75%) <br />fee charged against the value of the motor vehicle. <br /> <br />In 1948, the rate of the VLF was increased to two percent (2%) of the <br />value of the vehicle. <br /> <br />In 1986, the voters voted overwhelmingly to constitutionally dedicate the <br />proceeds of the VLF to fund city and county services. <br /> <br />In 1998, a period of strong economic growth, the Legislature approved the <br />use of a portion of the rapidly growing state General Fund to reduce the <br />VLF payments of vehicle owners. This amount, known as the "offset", <br />grew in future years to a sixty-seven and ¼ percent (67.5%) offset against <br />the amount owed. The amount paid to local governments in lieu of the <br />reduced VLF payment is known as the "VLF backfill." <br /> <br />The 1998 legislation and subsequent enactments contain clear provisions <br />that when insufficient funds are available to be transferred from the <br />General Fund to fully fund the offsets and backfill amount that the VLF <br />offset shall be reduced and VLF payments increased. <br /> <br />VLF and backfill revenues constitute fifteen to twenty-five percent (15- <br />25%) of typical city and county general purpose revenues. On average, <br />more than sixty percent (60%) of city general fund spending and more <br />than half of county general funds go to front line law enforcement, fire, <br />emergency medical services, and health care programs. <br /> <br />Resolution No. 2003-020 <br /> Page 1 of 3 <br /> <br /> <br />