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Receive a verbal update from Metropolitan Transportation Commission (MTC) Commissioner Jim Spering on MTC, including the Bay Area Housing Finance Authority, which is considering placing the Bay Area Affordable Housing Bond on the November 2024 ballot; and Receive a verbal update from Paragon Government Relations, the County’s federal legislative advocates, and from Shaw Yoder Antwih Schmelzer & Lange (SYASL) the County’s State legislative advocate, on legislative matters of interest to the County; and Receive an overview from staff and SYASL on California Initiative 1935, the Taxpayer Protection and Government Accountability Act (2024) (21-0042A1) and provide staff with direction
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Published Notice Required? Yes _______ No ___X__
Public Hearing Required? Yes _______ No ___X__
DEPARTMENTAL RECOMMENDATION:
Receive a verbal update from Metropolitan Transportation Commission (MTC) Commissioner Jim Spering on MTC, including the Bay Area Housing Finance Authority, which is considering placing the Bay Area Affordable Housing Bond on the November 2024 ballot; and Receive a verbal update from Paragon Government Relations, the County’s federal legislative advocates, and from Shaw Yoder Antwih Schmelzer & Lange (SYASL) the County’s State legislative advocate, on legislative matters of interest to the County; and Receive an overview from staff and SYASL on California Initiative 1935, the Taxpayer Protection and Government Accountability Act (2024) (21-0042A1) and provide staff with direction.
SUMMARY:
MTC Commissioner Jim Spering will provide the Board with an update on MTC, including BAHFA, which is considering placing the Bay Area Affordable Housing Bond on the November 2024 ballot to generate $10 to $20 billion to build more affordable homes and help keep existing homes affordable. The County’s federal legislative advocates at Paragon Government Relations will give a verbal update on developments taking place in Washington D.C. and key legislation of interest to the County. The County’s State legislative advocate, Paul Yoder of SYASL Partners, Inc., will provide a verbal update on developments at the State Capitol and key legislation of interest to the County. Staff, with support from Mr. Yoder, will provide an update on California Initiative 1935, the Taxpayer Protection and Government Accountability Act (2024) (21-0042A1) and seek Board direction. A description of the initiative is presented in detail below in the Discussion section of this report.
FINANCIAL IMPACT:
The legislative program is designed to result in additional funding and cost avoidance relative to Solano County. The cost of preparing this report is nominal and is included in the County Administrator’s FY2023/24 Working Budget.
DISCUSSION:
With permission from the Legislative Committee co-chairs, Supervisors Erin Hannigan and Monica Brown, staff cancelled the meeting scheduled for Monday, June 3, 2024. The committee co-chairs requested that staff, with assistance from our state lobbyist, provide an overview of the California Initiative 1935, the Taxpayer Protection and Government Accountability Act (2024) (21-0042A1) to the full Board and seek direction on how they would like staff to proceed. It was also recommended that the Board receive a verbal update from MTC Commissioner Jim Spering on MTC, including BAHFA, which is considering placing the Bay Area Affordable Housing Bond on the November 2024 ballot to generate $10 to $20 billion to build more affordable homes and help keep existing homes affordable. A detailed summary of each item is listed below.
CA Initiative 1935, Taxpayer Protection and Government Accountability Act (2024) (21-0042A1)
Currently, state law requires increases in local taxes to receive approval of the local governing body, for example, a city council or County Board of Supervisors, as well as approval from voters in that local jurisdiction. Most proposed taxes require a two-third vote of the local governing body before being presented to the voters. Special taxes require a two-thirds vote of the electorate while other types of taxes require a majority vote of the electorate. The majority-vote general taxes can be used for any purpose. Currently, local governing bodies can delegate their authority to adjust fees and other charges to administrative entities, like city and County departments. In these cases, these charges can be increased or changed by the department within certain limits.
The CA Initiative 1935, Taxpayer Protection and Government Accountability Act (Initiative 1935) proposes to amend the State Constitution to change the rules for how the State and local governments can impose taxes, fees, and other charges. Currently, under the State Constitution, state tax increases require approval by two-thirds of each house of the Legislature or a majority vote of the statewide electorate. The Legislature can reduce taxes with a majority vote of each house, provided the change does not result in an increase in taxes paid by any single taxpayer.
According to the California Legislative Analyst Office (LAO), Initiative 1935 would have several impacts on state and local governments when it comes to how they can impose taxes, fees, and other charges. The measure would expand the definition of tax to include some charges the State and local governments currently treat as fees and other charges, making them subject to the higher state and local vote requirements for taxes. The measure would also increase the voter requirements for increasing state taxes, requiring proposed tax increases received approval by two-thirds of each house and a majority vote of the statewide electorate. Additionally, the measure would nullify any local tax approved between January 1, 2022, and the effective date of the measure unless it fulfills the requirements of the measure.
Initiative 1935 would require the Legislature and local government bodies to impose state and local fees, restricting the ability of State and local governments to delegate fee changes to administrative entities. In many cases, existing fees already reflect the actual cost to the State or local governments providing the services, and, if a fee payer challenges the charge, the State or local government would now be required to provide clear and convincing evidence that the fee charged “is the minimum amount necessary,” which is not subject to a vote by the electorate, and not a tax under the new definition.
The LAO concludes that Initiative 1935 would lower annual state and local revenues, potentially substantially lower, depending on future actions of the Legislature, local governing bodies, voters, and the courts. It would also make it harder for local governments to raise revenues, consequently, future local tax and fee revenue could be lower than they would be otherwise. In some cases, state and local departments would need to develop methods for setting fees to reflect actual costs if the Legislature or local governing bodies wanted to change those fees in the future. Estimating actual costs by program and fee source could involve some added workload for those state and local departments, which likely would be supported by fee revenue.
MTC Commissioner Jim Spering and BAHFA, 2024 Bay Area Housing Bond
The Metropolitan Transportation Commission (MTC) is a regional transportation planning agency located in the San Francisco Bay Area of California, United States. It is responsible for coordinating transportation planning, funding, and policy decisions for the nine counties in the Bay Area: Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, and Sonoma. The MTC's primary goal is to improve transportation systems and infrastructure to enhance mobility, reduce congestion, and promote sustainability in the Bay Area. It works closely with local governments, transit agencies, stakeholders, and the public to develop long-term transportation plans, allocate funding for transportation projects, and implement policies that address regional transportation challenges.
Jim Spering was reappointed to the MTC on December 12, 2022 and represents Solano County and its cities on the commission. Commission Spering is responsible for representing Solano County on a number of matters of transportation planning, including allocating funds for projects, policy development, coordination with regional partners, and public engagement. Commissioner Spering is also well versed on the BAHFA 2024 Bay Area Affordable Housing Bond, a proposed $10 to $20 billion dollar bond to make the nine-County Bay Area more affordable when it comes to housing.
The 2024 Bay Area Affordable Housing Bond is a general obligation bond, a borrowing tool available to the public sector to raise revenue for infrastructure, including affordable housing. If Bay Area voters approve the proposed bond in November 2024, the funding will seek to build and preserve affordable homes, provide new resources to help make housing more affordable, generate long-term funding that is not dependent on taxpayers and transform the way the region finances and delivers affordable housing. To read the full BAHFA Bond Report, visit <https://mtc.ca.gov> and search “Bay Area Housing Finance Authority bond.” A summary of the estimated Solano County bond receipts is included in Attachment B. A copy of the presentation by BAHFA staff to the City-Coordinating Council on April 11, 2024 is included as Attachment C.
OTHER AGENCY INVOLVEMENT:
Staff consulted with Solano County Department Heads, Paragon Government Relations, SYASL Partners, Inc. and MTC Commissioner Jim Spering to compile this legislative report.