County of Sonoma v. Commission on State Mandates

In response to a budget crisis in 1992, the Legislature reduced the share of property taxes previously allocated to local governments and simultaneously placed an equal amount of property tax revenues into Educational Revenue Augmentation Funds (ERAF’s) for distribution to school districts. The County of Sonoma (the County) then sought reimbursement pursuant to article XIIIB, section 6 of the California Constitution (section 6), contending that the ERAF legislation amounted to the imposition of a state mandated program or higher level of service. The Commission on State Mandates (Commission) determined that section 6 does not apply to this reallocation of tax revenues. The superior court disagreed and issued a writ of mandate ordering the Commission to conduct further proceedings to determine the amount of reimbursement due to the County. The issue raised by this appeal is whether enactment of the ERAF legislation resulted in costs to the County for a state mandated new program or higher level of service, thereby requiring reimbursement pursuant to section 6.

We conclude that the state is not obligated to reimburse local governments for this change in the allocation of…