Lawmakers in the state capitol have repeatedly taken revenue from local government to balance state budgets over the past decade. These raids on local dollars have resulted in lower levels of services for communities throughout the State and Goleta is no different. While we have weathered these shifts, the State’s action to eliminate redevelopment agencies created a significant financial burden that demands the city re-examine the revenue structure envisioned during our incorporation.
As a condition of Goleta’s incorporation, the City of Goleta and the County of Santa Barbara were required to enter into a tax-sharing agreement called a Revenue Neutrality Agreement (RNA). Governed by State Law, RNAs are designed to protect counties from completely losing the revenue that becomes part of the tax base for the new City. The agreements provide a smoothing effect over a number of years to help the County transition from its reliance on those monies while the city matures its tax base to pay for its own resident’s needs.
Because they are intended to help the city and county through a transitional time, neutrality agreements generally sunset after a fixed number of years. But the agreement for Goleta is an exception in that a significant amount of local taxes are taken by the County of Santa Barbara in perpetuity. Approximately $5 million per year – or 20% of the cities entire budget – leaves Goleta and passes through to County administrators.
While the perpetual nature of this agreement with the county is unfortunate for Goleta residents, the agreement did anticipate the need to reexamine the financial arrangement if structural changes if structural changes to Goleta’s financing were to occur – which it has as a result of the state’s elimination of redevelopment funding.
The City Council will be considering the opportunity to educate the community on the current agreement and investigating ways to encourage the County of Santa Barbara to come back to the negotiating table to establish a more reasonable agreement.