GILROY –– A locally born idea for changing the state’s tax collecting system – so it better favors cities – is receiving a “positive” response from city council members statewide.
However, the Gilroy City Council member who came up with the idea said council members around the state do not appear ready to take the matter to court.
During a recent League of California Cities convention in Sacramento, Councilman Russ Valiquette said he made little progress convincing statewide city leaders that California’s system of tax collection needs immediate fixing by the courts.
“Like any new idea, people needed time to think it through,” Valiquette said. “But at the very least it kind of turned on a light with some people that there is a way to control (the state’s ability to siphon local funds).”
Valiquette said he spoke with about 50 city leaders who attended the conference late last month.
Specifically, Valiquette wants cities to file a lawsuit against the state citing the way it collects and distributes city-generated tax revenue – such as sales tax – is unconstitutional. Valiquette wants cities to collect their own taxes and distribute what they owe to the state. If a court agrees with him, it would severely limiting the Legislature’s ability to shuffle funds at the expense of cities.
Since the early 1990s, the state has taken $16 million of tax revenue from Gilroy to balance state budgets.
Valiquette said he did not formally present his idea at the conference. Rather, he took time to explain himself to other cities’ council members during meals and other social events.
“We don’t have to take action right away, but at least there’s one more thing that’s kind of an outside the box solution we can look at,” Valiquette said.
Locally, Gilroy Mayor Al Pinheiro said other council members must push for the lawsuit before it gets his backing. Pinheiro also said he’d prefer to see cities join the lawsuit, rather than make Gilroy go it alone.
“I don’t want us to be lone rangers,” Pinheiro said.
