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Negative bailout fix to help county
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State legislators who represent Stanislaus County are ecstatic over the passage of AB 107 which ends the so-called "negative bailout" for Stanislaus County.

Stanislaus County is one of the few California counties that remains penalized by a property tax formula designed to help schools and local governments after the passage of Prop 13. It is estimated that Stanislaus County loses from $3 million to $6 million a year depending on the economy.

The "bailout" was a post Prop. 13 action by the state to bailout counties and cities for lost property tax revenues. Six counties, of which Stanislaus is the largest, did not depend on property tax as much as most and were negatively affected by the bailout formula. Over 35 years this has resulted in Stanislaus County paying the state approximately $72 million.

"For over three decades, Stanislaus County has suffered the financial burden of being one of California's ‘negative bailout' counties," said State Senator Anthony Cannella, R-Ceres. "This additional cost to the county, that was born out of the way Proposition 13 funds are disbursed, should have been rectified long ago. Since joining the Senate, I have worked on finding a fix to this problem that takes $3 million in property tax revenue annually from Stanislaus County."

The bill, which seeks to "right this wrong" said Cannella, still must be signed by Gov. Jerry Brown.
"I hope that Governor Brown understands the importance of this bill for Stanislaus County and signs it into law."

State Assemblyman Adam C. Gray, D-Merced, said the bill "ends the long running over taxation of Stanislaus County residents that resulted from legislation following the passage of Prop. 13. Our taxpayers have paid for this flawed policy for over 35 years."

Gray and the other members of the Redevelopment Agency Task Force negotiated language with the administration for months in order to avoid the governor's veto. The final product, SB 107, is a compressive redevelopment reform measure which eliminates the Stanislaus County negative bailout and addresses redevelop issues elsewhere in California.

"Stanislaus is the big winner here," said Gray. "Our local representatives have fought this fight for decades. Former governors, of both parties, vetoed every legislative fix that reached their desks. I am confident that this time will be different. This burden will finally be taken off Stanislaus's shoulders."

State Senator Cathleen Galgiani, R-Stockton, who represents Turlock, said that "an extra $2 million or more a year will be a significant benefit to Stanislaus County."

The Senate passed SB 107 with a vote of 24-15.

Numerous local legislators have attempted to fix this consequence over the last 30 years without success.

Senator Galgiani and a bi-partisan group of local legislators have worked for several years with the Governor to get the problem fixed in the budget and were successful getting it in a budget trailer bill this year.

That bill seemed to falter in the Assembly this summer but was revitalized after Senator Galgiani sought to introduce a free standing bill and then got the active support of the Senate leadership to work on the Senate Local Government bill.