Senate Standing Committee on Local Government

Senate Committee on Local Government will come to order. Good morning. Thank you for joining us for this meeting of the Senate Committee on Local Government. We welcome the public in person, and we are holding our Committee hearings here in the O Street building.

We only have one bill on today's agenda, so I ask all members of the Committee be present in room 2200 so we can establish our quorum and begin our hearing. This item is being considered under Senate Rule 2910.

Our Committee heard this measure previously, but it was substantially amended on the floor, so the Senate Rules Committee has referred the bill to us to hear those changes. As I look around, we do not have a quorum, so we will operate as a subcommittee. Okay. We have the author, Assembly Member Wilson. Welcome. Good morning.

Just to remind we have, if needed, two lead witnesses. Two minutes each, and we will have support and opposition after your presentation. Welcome.

Thank you, Madam Chair. Thank you, members, even those who are unlikely to support. Very happy that we got. Yes. Open mind. Open mind. I appreciate that, really. I'm very pleased to present AB 3259 before your committee one more time.

It is primarily a district bill providing needed clarity and flexibility for voters in Solano county to raise local revenue. As the chair noted, the amendments, since you saw it last time, simply add two other cities that are seeking the same flexibility, City of Pinole and the City of Campbell.

They both, as well as an urgency clause needed for the initiatives peering on the ballot November and other technical clarifying changes. Both of these cities are in similar positions to the City of Benicia and do need this bill specifically. This bill would raise a statutory transaction and use tax limit above the 2% cap to allow.

Allow cities within the aforementioned jurisdictions to vote on measures that raise local revenue at a rate not to exceed 0.5% with a sunset in 2029. Now, both the cities of Pinole and Campbell, just like the City of Benicia, have sales tax measures on the ballot in November. This is after gauging community support and receiving overwhelming support.

With me to testify today is Nicola. I'm sorry, I'm going to mess it up, even though I know your name. Nicolo De Luca on behalf of cities of Campbell and Pinola.

Good morning, honorable chair and committee members Nicolo DeLuca. On behalf of the cities of Pinole and Campbell, just want to express extreme gratitude for the Assembly Member for including us into this Bill, and, of course, your Committee staff for all their hard work. Happy to answer any questions, and thank you very much.

Thank you. Do we have any other witnesses?

Just a quick support. Karen Lange, on behalf of the Solano County Board of Supervisors, I didn't get here the first time, so just thank you in support and appreciate it.

Okay, anyone else in support of AB 3259? None? Is there anyone in opposition? AB 3259? Okay, seeing none. Questions in comments. We have a lot of time, so you can. You can ask all the questions you want.

We could talk about almost anything. [The aforementioned treatise that one of our colleagues accused me of doing.]

Okay, well, questions, comments, anything concerns.

You know what? I'll make a couple. So we're not flying blind. And you know why I stand where I stand. Yeah. So you know these. Over the years, there's been an increase in that.

That percentage that when you buy a house and they give you your tax Bill, you have your 1% ad valorem, and then you have all the rest of the stuff. And traditionally, it's been. People have tried to keep that under the 2% mark because it becomes unaffordable.

That becomes the unaffordability for people who are trying to buy a house. And right now, we're in the midst of trying to give people down payments on really expensive houses still. And so they're really on the brink of not being able to do that. And in the meanwhile, we're kind of enabling.

You know, it's kind of like student loans. The more student loans you give people, the more everybody charges for everything. And so we're piling costs into all the housing and the stuff that we're doing out there. You know, CSD's and CFDs have become the clearinghouse for all fees related to building.

And so that turns what would have been a $10,000 or $20,000 share for that particular residential unit into a long term 30 year bond that they're paying up to two or three times as much for. And all of those costs are part of what's happening to California in terms of being too expensive.

We do a lot of things that are optional, voluntary, and we make the mandatory costs, and that raises the price. And then it necessitates cities having to go to the well, which is their taxpayers. And there's only so much money out there for those taxpayers before they finally cracked and they start moving. And we've already seen that.

And, you know, I would like to see, before we resort to that, to telling people, hey, we need more money from you.

I would like us to be a little bit more frugal on how we spend and how we determine you know, what costs are going to be associated with building a home or building a street or building anything? It costs three times as much to build a road here as it does in Arizona.

And you got to ask ourselves why? And the answer can't be, well, we'll just keep extracting more and more money until people can't take anymore, and then they leave, because then we won't have more and more money. We just have a mountain of debt and no place to go. So those are my concerns with this approach.

And until I see the state in general be better at cost containment on our side, it's hard for me, even in a different district, and I realize this is a district bill, but even another district to condone what I think is actually adding to the problem of affordability in California.

So I'm glad I was able to explain that it's not just an automatic no for nothing. That has some reasoning behind it. And while some people might not think it's a great reasoning, it is my reasoning, based on my experience and watching people in my district struggle with even, you know, lower taxes than that.

So now it looks like you have what you need quiet, and then give. It right back to the chair, if it's okay.

Through the chair very quickly. Okay.

Actually need to do the quorum. Yeah, that'd be great. And then you can close.

[Roll Call] You have a quorum.

Great. Now that we have a quorum, we could entertain a motion. So move. Okay. And Assembly Member, would you like to close?

I would. I thank you for the comments from my colleague, the Senator. And I agree with quite a bit of them. And I do think we are struggling with, as a state, affordability overall. And we have to do something about the base that these taxes are built on.

And that is the requirement of every single Legislator, no matter which house you're in, to be able to focus on that, because we have to make California more affordable so that people who grow up here can stay here.

And so everything that I can do within the tenure that I have, if the voters allow me to continue to stay, will be about driving, driving down those costs, because it's extremely important. And, you know, my background is in business Administration, finance, budgeting. You know, I care about those.

It's interesting that this time I've had the opportunity to work on the bond, which is debt, and work on these taxes, which is tax. And it's usually those are two things I shy away from, but they're extremely critically important. And especially this.

This empowers the communities to be able to go to their voters and say, do you want to increase your taxes, to be able to take care of a community need. In the case of City of Benicia, they've already taxed themselves, and this is a voter initiative tax. It's not even the city, city had already did it.

And now the voters have come forth. And the same thing in Pinole and Campbell. These are things where there has been broad support, but they're limited. And so this is an opportunity for them to help themselves, which is something we definitely want.

And I hope that we'll have support to be able to continue this endeavor, for cities to take matters in their own hands, to ensure that they are able to meet the services that their community requires. And with that, I respectfully ask for an aye vote.

Great. Thank you very much. The motion has been made by Senator Skinner. Oh, I'm sorry, Senator Skinner.

Thank you. And no, we're, I just wanted to get in some comment before. I know there was some discussion by our colleague here, Senator Seyarto, about cost of living and such, but this does require voter approval.

And as has been pointed out by the author, in many cases, in certain of the cities in the county where this is going to affect, the voters have already affirmed their interest, and again, to continue to impose anywhere else, the voters would have to affirm.

And I think this is a very legitimate action for us to take, to give those communities that right and to give the voters the ability to approve. Pinole is in my district, and they are very eager to see us deliver this for them and why I made the motion and why I support the bill. And thank you.

Once we've opened it up again, I have one additional comment.

Go ahead, Senator.

Thank you. You know, there are other ways other than a sales tax measure or something like that, to be able to get a community buy in. That's through assessments and things like that.

You put an assessment on the ballot, it doesn't take this, the cities can do that, do it that way, and it doesn't count towards the 2%, and it allows them to do that. So that's what I'm saying is there are other ways besides blowing past the 2% on our march to three and 4%.

Right.

So that's, that's my point. Thank you. Understood. Thank you to both Senators.

Thank you. The motion is to return the bill to the Senate Floor. Assistant please call the roll.

[Roll Call] Three to two.

The bill will go on call. Okay, we will end. I want to thank everyone who participated in today's public.

Sorry, we're on recess. Thank you. Resuming the hearing. call the most recent member.

Motion is that. The measure be returned to the Senate Floor for consideration. Current vote is three to two, with the chair voting aye. [Roll Call] 4-2.

Okay, thank you. The Bill is out.

Okay, the Bill is out.

Close the roll. Thank you to all individuals who participated in public testimony today. If you were not able to testify, please submit your comments or suggestions in writing to the Senate local government committee or visit our website. Your comments and suggestions are important to us, and we want to include your testimony in the official hearing records.

Thank you. Thank you to the staff. We've concluded the agenda. The Senate Committee on Local Government is adjourned.