The litigation was filed by the League and the cities of Chico and Porterville in July 2011 challenging the constitutionality of the state’s diversion of vehicle license fee (VLF) revenues through SB 89 and AB 118 as part of the FY 2011-12 budget.

As part of last year’s budget, the state diverted $130 million of local VLF funds to finance certain public safety grant programs previously funded through the now-expired special 0.15 VLF, including payments to local and state agencies that are not eligible to receive VLF funds under the California Constitution. These dollars funded municipal public safety and other vital services and also included special allocations for four newly incorporated cities and recently annexed inhabited areas. 

Judge Connelly requested supplemental briefs from both parties at the conclusion of today’s hearing. Briefs are due to the court by July 23 with responses due by Aug. 20.