LOSS OF VEHICLE LICENSE FEES COULD THREATEN CITY SERVICES

SUNNYVALE, Calif. – As the State rescinded the increase in vehicle license fees (VLF), the threat to local government has grown dramatically. The potential loss to the City of Sunnyvale could be as high as $5 million a year, which could wreak havoc with the City’s ability to provide vital services.

The State has already failed to provide $1.7 million in anticipated VLF funds to Sunnyvale. While these funds are scheduled to be repaid to the City in 2006, there is no guarantee the payment will actually take place.

"We are deeply concerned about whether or not the State will in fact backfill the VLF monies to local government," said Sunnyvale City Manager Robert S. LaSala. "If these funds are not forthcoming, Sunnyvale could lose $5 million dollars or more annually in General Fund revenues, which would be a staggering blow."

Sunnyvale already restructured its budget downward by nearly $15 million for the current fiscal year, based on declining revenues. That loss required the first-ever service reductions and staff layoffs in City history. According to City officials, an additional loss could result in severe reductions in Library services, public safety, or other vital services.