The Metropolitan Forum Project Reviving Citizen Civic Engagement
San Fernando Valley Area Subregional Groups' Findings

Impacts from the Present System of Local Government Finance

March 03, 1998

  • Cities, Counties and school districts have a lack of discretionary funds. Public budgets are a political tool. During local elections, voters often choose candidates with specific program proposals. The lack of discretionary funds makes it very difficult for these candidates, when successful, to keep faith with the voters and institute the programs they promised. The consequences are often a failure to keep campaign promises, or the sacrificing of other programs or less visible but critical public responsibilities, (deferred maintenance, staff reductions in less sensitive departments, etc.) This leads to a further erosion of public trust in leadership and government in general.
  • The lack of flexibility in budgeting creates problems. The public is often unaware of the degree to which it has limited the ability of local government to manage funds. This leads to tremendous frustration when government has little money left for certain basic services while there are funds available for less critical or exotic purposes.
  • Budget cuts are often drastic. While the public may not always be aware of the management issues surrounding cuts, the cuts in equipment and personnel leads to potentially higher future costs and low employee productivity resulting from low employee morale. This often leads to dissatisfaction from the public.
  • Long range planning suffers as government agencies are focused on short term survival rather then long term public service goals.
  • Cities and Counties are becoming more creative in the financing of public services. Recent actions limiting or removing local government revenues has caused a "self examination" of the manner in which some local governments operate. It has also lead to a more business-like approach in many areas. An example of this is the City of San Fernando which was able to add more police officers by getting more efficiencies out of their police equipment.
  • In some cases, public services have suffered as organized, public employees have reaped more and more public dollars. Particularly in larger cities, employee unions often have undue influence over the political process. This may lead to contracts which serve the needs of certain union membership at the expense of sound management principles and the adequate, wide spread, provision of public services.
  • Business taxes in the City of Los Angeles have gone up tremendously since the state shifted local revenues during the ERAF action. This harms small businesses and drives them to other areas. Many of these taxes are hidden and the public may not be as aware of them.
  • Other taxes, such as the utility tax in Los Angeles, have been raised and hidden. This adds to voter dissatisfaction with government.
  • "Bed" taxes have been raised in many jurisdictions. This tax is seen as politically viable since it does not directly tax the residents.
  • The public has a tough time relating to difficulties in financing local government. Few people in Orange County felt directly impacted by the Orange County bankruptcy. In addition, in spite of dire predictions before the passage of proposition 13, the only impact most people recognized or continue to recognize was/is the limit on property taxes. Those who are saying that any current shortfalls in local government funding are consequences of Proposition 13 have little credibility since it is so far removed.
  • There is a growing lack of connection between the collection of taxes and provision of services.
  • The public feels no sense of ownership in government.
  • The perception of public employees, by the public, is poor and continues to diminish.
  • The current system of local government financing encourages local agencies to contract more services out since private employees are often paid less then public employees. This, however, may have consequences in the community since the work force is paid less. (buying power, taxes paid, ability to provide basic services to their families and the possible need for government assistance, etc.) Unchecked, this may lead to the erosion of the "Social Order."
  • The "privatization" of public services is increasing and will inevitably continue. This may not be desirable for many public services.
  • Part time faculty is replacing full time tenured faculty in our universities. In addition to the direct economic impact to the campus community, part time faculty have less of a personal stake or investment in the campus. This may have a profound impact on the long term social and economic fabric of our public universities.


  • The City of Los Angeles receives 26% of each property tax its residents pay. The City of San Fernando receives 14%.
  • The City of Los Angeles has a utility tax. The City of San Fernando does not.

Valley Secession

  • Many governmental jurisdictions lack a sense of geography. Government should recognize natural boundaries in setting jurisdiction or Council districts.
  • While secession is centered around the structure of the City of Los Angeles, it is unclear how much or the lack of available funds for public services in the Valley is due to leadership within the City or simply living in the post Proposition 13 world.
  • The Valley secession movement has accomplished the following:
    - Exposed existing fractures in the City of Los Angeles
    - created a dialouge of the structure of Los Angeles City government
    - Promoted Charter reform
    - Exposed structural problems with the City of Los Angeles
    - Got the attention of downtown
    - Promoted other areas of the City to discuss secession elsewhere
  • There may be or have been a perception by the rest of the City of Los Angeles of the Valley as lacking diversity. The reality is far different. The Valley reflects the City’s rich diversity.
  • There was a lack of recognition from the rest of the city regarding the real challenges facing the Valley. The "wealth" was not being shared with the Valley as a result.
  • There is a strong desire on the part of Valley residents to have local services provided locally.
  • There is a desire to build a stronger sense of community within the Valley.
  • There is a strong sense of lack of control over the city, county and the LAUSD and the people of the Valley want better local control.
  • Even within the Valley, however, there is a lack of recognition of some of the model communities within its geographic borders, (San Fernando, Calabasas).
  • Valley secession discussions may be fueled by a "grass is greener" mentality. This may be due to the growing frustration people are having with government.
  • The secession concept was caused by a lack of attention by the government and business community in downtown Los Angeles. Many in the Valley are willing to consider any alternative to gain more local control.

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