A brief history of the revenue neutral law clarifies the necessity of its passage by the Legislature in 1992 and the importance of its enforcement in the ongoing conflict between the City of Citrus Heights and Sacramento County. The articles, by a Citrus Heights council member and the Citrus Heights city manager, indict the revenue exchange agreement adopted by the voters of the City of Citrus Heights and the Sacramento County Board of Supervisors as unfair. The articles also make numerous assertions that the revenue neutral statute is an unfair obstacle to local self-government and that it robs citizens of the ability to finance new or enhanced services.
Nothing is further from the truth.
A little history is in order. Prior to Proposition 13, when an area wanted to incorporate, state law permitted the new city to impose a property tax on the property located within the city. Likewise, sales taxes, hotel-motel taxes and most other revenues automatically transferred to the new city upon incorporation. If the loss of significant amounts of tax revenues became a problem for a county or any other affected jurisdiction, taxes could be adjusted to meet service obligations or to enhance services. Proposition 13 radically changed property taxes and their distribution.