Sponsored by Assemblyman Darrell Steinberg of Sacramento, AB 680 would establish a system for sharing sales tax revenue among the 18 municipalities in the Sacramento metropolitan region. Because of limitations on how much revenue cities can raise through property taxes, California cities are especially dependent on sales taxes.
As initially drafted, Steinberg’s bill called for full revenue-sharing, where all of the sales tax revenue in the region would be pooled and redistributed based on each community’s population. The bill has since been modified to enhance its chances of passing. As currently structured, the bill would pool only sales tax revenue generated from new development. One-third of the pooled revenue would be redistributed to the cities based on population. Another third would stay in the city where the development is located. The final third would also go to the host city provided it meets certain "smart growth" goals, including affordable housing creation, open space preservation, and infill development.