Which governance and revenue bills do cities need to worry about?

Simran Kohli is a 2024 Ronald O. Loveridge Summer Fellow and a political science administrative studies major at the University of California, Riverside. She can be reached at skohli@calcities.org.

The Legislature is set to vote on a handful of bills with significant financial impacts to local agencies in the coming weeks. These proposals touch on issues ranging from contractor reporting obligations and workforce vacancy plans to restrictions on employer-employee communications.

Changes to regulatory requirements must consider the practical challenges facing municipalities, which many of these bills fail to do.

Reporting proposals could undercut critical government services and revenues

A pair of bills opposed by Cal Cities could slow down the core function of local governments. AB 2557 (Ortega) would force many organizations that contract with cities to adopt new onerous reporting requirements. These broad provisions would increase costs for cities, delay both routine and expected public services — from payroll services to emergency responses — and expose contractors’ employee data.

This impractical and duplicative requirement would likely disincentivize contractors from working with cities, particularly small businesses and nonprofits. Moreover, the bill’s vague provisions would almost certainly lead to disputes and service delays.

The other measure, AB 2561 (McKinnor), would require local agencies with bargaining unit vacancy rates that exceed 15% for more than 180 days to create a plan to reduce their vacancy rates. Cities would need to present this plan during a public hearing to the governing legislative body.

AB 2561 comes as many cities are struggling to fill specialty positions, like city planners or social workers, due to a dwindling pipeline for new hires and an aging workforce. Cities must also compete with the private sector, which tends to pay more. Instead of addressing the issues, this bill would burden cities with more planning requirements.

New communication standards go too far   

Lawmakers are also debating a bill that would restrict an employer’s ability to conduct internal investigations to the detriment of employees and the public’s safety and well-being. AB 2421 (Low) would prohibit public employers from questioning employees and employee representatives about communications between employees and employee representatives related to the representative’s representation.

Cal Cities has opposed the proposal since it was first introduced in 2013 and again in 2018 and 2019. The issues are succinctly captured by Gov. Jerry Brown’s veto message for AB 729 (Hernandez, 2013), who noted the bill would “put communications with a union agent on equal footing with communications with one's spouse, priest, physician or attorney.” If passed, AB 2421 could compromise the ability of employers to conduct investigations into workplace safety and harassment allegations, adding new costs and liability for public employers. 

Another measure, SB 399 (Wahab), is designed to protect workers from adverse action if they refuse to attend a meeting about politics or religion. Although not targeted at cities, Cal Cities opposes the bill, as its broad definition of “political matters” could hinder many routine government functions: Any government activity could be argued as political, leading to costly legal disputes.

Other notable governance and revenue bills

It’s not all bad news for cities. AB 2631 (Fong), co-sponsored by Cal Cities, would require the Fair Political Practices Commission to keep providing a key ethics training requirement to city officials for free. Cal Cities is also supporting AB 2041 (Bonta, Mia), which would lift existing limitations and add needed expansions to how campaign funds may be used for security expenses.

AB 2564 (Boerner) — also supported by Cal Cities — would allocate funding from the General Fund to support the Senior Citizens and Disabled Citizens and Disabled Citizens Property Tax Postponement Program. By reinstating support, the program would provide financial relief to eligible individuals who may have difficulty paying property taxes due to their age or disability.

Last, but not least: Cal Cities stopped SB 1164 (Newman) right before the summer break. The bill sought to temporarily exempt new accessory dwelling units (ADU) from property tax assessments if owners made a “good faith effort” to ensure the unit was used for housing. By reducing property tax revenue, SB 1164 would have limited cities’ abilities to fund essential public services.

Sen. Newman argued that property taxes are a deterrent to ADU developments and that SB 1164 would have helped overcome this “perceived barrier.” The numbers do not support this argument, as the number of new ADUs and ADU permits have significantly increased year over year. A report by the Department of Finance found that ADUs represent one in five new homes built in California.

Additional contributions by Cal Cities lobbyists Johnnie Pina and Ben Triffo, as well as legislative affairs analyst Betsy Montiel.