In enacting SB 1559 and its subsequent clean-up legislation, the Legislature and the Governor were well aware of the need for it and of the consequences. Documents used by legislators in making their decisions on the bill are very clear on these issues. This change would help counties to survive the continuing losses in state subventions and increases in caseloads for state-required programs. It will also help to reduce the 'fiscalization of land use' situations where city boundaries are drawn to include only the territory that produces high tax revenues. The opponents of revenue neutrality argue that the law is vague and overly broad, and they cite complaints about the actual calculation of revenue neutrality.
Nobody gets a profit, nobody suffers a loss.
The Senate analysis of the measure is even more direct in predicting the future impacts of the provision. Therefore, if a county provided poor service to an area that subsequently becomes a city, then the city could only receive revenue reflecting the cost of the county's poor service. The League of California Cities' articles further argue that the revenue neutral law is intended to discourage incorporations. This is not true. It is designed to put an end to the unintended and inappropriate policy of requiring counties to be the deep pocket for enhanced services for residents living in the new city at the direct expense of the rest of the county's citizens.