08-27-1986 Council Agenda - Laserfiche WebLink

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July 11, 1986 GOVERNMENT FINANCE CF =!CERS ASSOCIAT,ON OPMERY NA ;NC!PJµ FNA NC; 1=RCERSASSOC'LAtON 04 (GRS - continued from cage 2) Status of 1986 GRS payments. The cuts required by Gramm - Rudman this year will have the following effect on General Revenue Sharing payments for the remainder of 1986: The July payment will be cut by 12.9 percent, representing a 4.3 percent cut for each of the three preceding quarters. The October payment will be cut by 37.9 percent. This represents a one - quarter Gramm - Rudman cut of 4.3 percent, plus a funding cut of 33.6 percent. For local government budget - planning purposes, Congress made provisions last year for its 8.4 percent appropriations reduction to be entirely from the October payment, rather than being spread over four quarterly payments. WASHINGTON UPDATE SOCIAL SECURITY "OPT -OUT" UPHELD PUBLIC INVESTOR HIGHLIGHTS MARKET RISKS SAN DIEGO PUBLISHES SMALL BUSINESS RESOURCE DIRECTORY Enclosed with this Newsletter is what we hope will be our last Washington Update on tax reform before a bill is enacted. Please read it and do the necessary follow -up work with your senators and representatives in order to preserve the market for tax - exempt bonds and protect the tax - exempt status of governmental bonds. The efforts of GFOA members have been instrumental in obtaining vast improvements in the tax -bill provisions affecting state and local governments. The U.S. Supreme Court has upheld the 1983 Social Security Amendments which repealed states' and localities' ability to withdraw from the Social Security System. In a 9 -0 vote the high court overturned the decision in Bowen v. Public Agencies Opposed to Social Security Entrapment by the Eastern District Court of California. This lower court found that the elimination of the "opt -out" provision was a breach of contract and therefore unconstitutional. In the unanimous opinion from the high court the justices concluded that the "contractual right" at issue in this case bears little, if any, resemblance to rights held to constitute "property" within the meaning of the Fifth Amendment. in addition, the justices said the Congress anticipated the need to respond to changing conditions when the Social Security Act was passed in 1935 and expressly reserved the right to alter, amend or repeal any provision. Fortunately, the decision is on the narrow question of "contractual rights" and not on the broader issue of universal Social Security coverage. Although universal coverage was discussed during the oral arguments, the ruling is silent on this issue. Universal coverage would require all state and local employees to pay into the Social Security System, and has been debated by the Congress on several occasions but never enacted. The July issue of Public Investor, GFOA's monthly subscription investment newsletter, discusses market price risks now facing bond investors. The July issue also contains three recent GFOA policy statements regarding relationships with securities dealers, master repurchase agreements and intergovernmental investment pools. Other articles discuss GNMA mutual funds and a small government's successful use of a forward delivery contract for its bond proceeds. A complimentary copy of the July Public Investor is available through the GFOA Technical Services Center in the Chicago office. The City of San Diego's Small Business Advisory Board, which was established by the city council in 1982, this year published the San Diego Small Business Reeource Directory. The directory consists of six chapters: agencies providing assistance to small businesses in San Diego; financial assistance; management and technical assistance; procurement assistance; educational and training assistance; and publications. While the directory is tailored to San Diego, it has information useful to small businesses in communities throughout the country. Anyone desiring a copy may send a check for $7.50 payable to Treasurer, City of San Diego to; City of San Diego, Small Business Advisory Board, Economic Development Division (Mail Station 502), 1222 First Avenue, San Diego, CA 92101