California LAFCo Annual Conference October 28-30, 2009
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Transcript of California LAFCo Annual Conference October 28-30, 2009
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California LAFCoAnnual Conference
October 28-30, 2009
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Sales and Use Tax Revenue: FY Total and Percent Change - State
Source: California Department of Finance, Financial Research Unit, December 11, 2008.
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The Fiscal Squeeze
Growing Service Demands
Increasing Costs
Falling Revenues
$9
$10
$10
$10
$10
$10
$11
2005-2006
2007-2008
2009-2010
Costs (Millions)
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Growing Service Demands
California Population: 1990-2030
0.0
10.0
20.0
30.0
40.0
50.0
60.0
1990 2000 2010 2020 2030
Year
Mill
ion
s
Source: State of CA, Dept. of Finance
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Increasing Costs
Agencies must make larger retirement contributions to offset CALPERS portfolio losses
CALPERS Investment Portfolio
-30.0%-25.0%-20.0%-15.0%-10.0%-5.0%0.0%5.0%
10.0%15.0%20.0%25.0%
99-0000-01
01-0202-03
03-0404-05
05-0606-07
07-0808-09
Fiscal Year
An
nu
al R
etu
rn
New Accounting Rules
Must address post employment benefits costs in current budgets
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Required CALPERS member contributions increase as stock market falls
Annual CALPERS Employer Contributions(Inflation-Adjusted to 07-08$)
$0.00$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.00
00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08
Fiscal Year
Bill
ion
s
Source: CALPERS
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Falling Revenues
Loss of sales taxes due to slowdown in consumer spending
Local Sales Tax Distributions(Inflation Adjusted to 07-08$)
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
00-01
01-02
02-03
03-04
04-05
05-06
06-07
07-08
Fiscal Year
(Mill
ion
s)
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Source: CA State Controller
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
98-9
9
99-0
0
00-0
1
01-0
2
02-0
3
03-0
4
04-0
5
05-0
6
06-0
7
07-0
8
08-0
9
09-1
0
Fiscal Year
An
nu
al C
han
ge
0.00.51.01.52.02.53.03.54.04.55.0
Sta
tew
ide
Ass
esse
d
Val
ue
($T
rill
ion
s)
Percent change Assessed Value
Loss of property tax revenues due to collapse of real estate bubble
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Loss of development-related revenues due to housing crash
California New Housing Starts
0
50000
100000
150000
200000
250000
2000 2001 2002 2003 2004 2005 2006 2007 2008
Un
its
Source: Calif. Building Industry Assn.
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Local agencies forced to loan up to 8% of 2009-1020 property taxes to State
State promises to pay by 2013
State decides to pay 2% interest
Loan securitization - but local agencies will likely pay higher interest rate
More Local Government Sacrifices to Help Balance 2009-2010 State Budget
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State suspends Williamson Act payments to local governments
Worth $33.1 million in 2008/2009
Top 5 Williamson Act Counties2008-2009 Allocations
Fresno, $4.8
Kern, $4.2
Tulare, $3.1
Kings, $2.3
San Joaquin, $1.7
Remainder of CA, $17.0
Source: CA State Controller