The San Benito County Board of Supervisors is trying to figure
out how to deal with a projected loss of nearly $4 million from the
county’s budget over the next 18 months.
The San Benito County Board of Supervisors is trying to figure out how to deal with a projected loss of nearly $4 million from the county’s budget over the next 18 months.
During its 9:30 a.m. meeting on Tuesday, the Board will consider adopting a pair of resolutions asking the state not to adopt two of the budget cuts proposed by Gov. Gray Davis.
The first resolution would have the county join forces with the County Supervisors Association of California in speaking out against the proposed elimination of promised reimbursements for the state’s vehicle license fees.
In trying to get a handle on the state’s estimated $34.6 billion deficit, Davis has proposed eliminating the reimbursements to cities and counties for the vehicle license fees.
A portion of the money collected from the purchase and annual registration of vehicles goes back to local government to pay for services and programs, including funding for the sheriff’s department and health clinics.
Since 1998, the state has reduced the vehicle license fee by nearly two-thirds and has repaid cities and counties an annual sum to make up for the lost funds.
Eliminating the reimbursements would mean a loss of about $1.1 million to the county’s current budget and an additional loss of approximately $2.7 million every year after that, county officials said.
“At some point, the counties and the cities would be left holding an enormous bag,” County Administrative Officer Gil Solorio said.
Statewide, the elimination of the vehicle license fee would save about $1.3 billion in reimbursements this year starting Feb. 1, and would cut another $2.9 billion next year.
The second resolution the Board will consider encourages state Sen. Jeff Denham, R-Salinas, and Assemblyman Simon Salinas, D-Salinas, to not only vote against elimination of vehicle license fees but to do what they can to protect the Williamson Act.
County officials are concerned that Davis is still considering eliminating the Williamson Act, which could cost the county an estimated $750,000 in contracted subsidies. Eliminating those subsidies would deal a heavy blow to local agriculture – an industry worth more than $210 million per year to the local economy.
The Williamson Act was passed in 1965 to balance the pressures of urban growth on agriculture by giving farmers and ranchers a tax incentive to stay in agriculture. The act saves agricultural landowners an estimated 20 to 75 percent in property taxes each year.
In place of the proposed cuts, Davis has proposed a one-cent state sales tax increase, which would go to counties to make up for the cuts.
But county officials said that will not balance out.
“That’s because there is an inverse relationship between the flow of sales taxes and the (funding ) they hope to shift,” Solorio said. “In other words, during harsh economic times, sales tax revenue decreases while the need for services increases.”
