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Description: The prior administration’s action to increase the VLF and the current administration’s subsequent action to reverse that increase have resulted in a number of issues of concern to the Legislature, including (1) the amount of VLF backfill that local governments did not receive during the current year “gap” period, (2) the amount of the backfill loan to the state from local governments, and (3) the amount of backfill to be provided to local governments experiencing hardship. We review the status of these issues and recommend that the State Controller provide information to the Legislature regarding the status of VLF backfill payments and gap period revenues. Accordingly, we withhold recommendation on the administration’s proposal to provide $51 million in local government hardship funding. We also recommend that the Legislature adopt the administration’s proposal to retain the current vehicle depreciation schedule adopted in conjunction with the 1991 program realignment.