LEGISLATION AND LEAGUE OF CALIFORNIA CITIES PRIORITY FOCUS BULLETIN Issues # 27 and 28 dated July 8 and July 15. July 8 2005 Issue #27 2005 LEAGUE APPLAUDS BUDGET AGREEMENT THANKS THE GOVERNOR AND LEGISLATIVE LEADERS The League and local government officials received a very welcome surprise on July 6 when Gov. Schwarzenegger and legislative leaders announced a budget agreement that includes full funding ($1.3 million) of Proposition 42 transportation projects and full early repayment of the $1.2 billion Vehicle License Fee (VLF) gap loan taken from cities and counties by the state in 2003. For more see Page 2. THE FINE PRINT Here is a summary of the key items in the budget affecting California cities: VLF gap loan early repayment: $1.2 billion ($491.2 million to cities) Prop. 42 city portion of local streets and roads money ($254 million for both cities and counties; cities get half of that $126.5 million). Additionally another $1 billion in Prop. 42 funds will be allocated to state managed projects many benefiting our local communities. For more see Page 3. EARLY REPAYMENT OF VLF GAP LOAN: A WELCOME SURPRISE FOR ALL CITIES The announcement that the FY 2005 06 budget will include early full repayment of the VLF Gap Loan is good news for cities and counties who will now receive this payment earlier than expected. The early repayment also benefits the state because it liquidates a state debt and eases some of the stress that will be felt in next year s state budget. For more see Page 3. Continued from Page 1 League Applauds Budget Agreement One day later the budget was passed by the Senate (34 4) and the Assembly (64 13) and sent to the governor for his signature. Both houses also passed the budget trailer bills. The League staff is reviewing both the budget and trailer bills to examine the details in the final language (see The Fine Print for some key items for cities). You can review the full text of the bills online at www.cacities.org. The bills are: Senate Bill (...
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