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Cities Say State Cuts Put Them on the Brink : Revenue: The next round of funding cuts will devastate services, local officials complain to lawmakers. An increase in the income or sales tax may be needed, they add.

March 25, 1993|NANCY HILL-HOLTZMAN | TIMES STAFF WRITER

WESTSIDE — The message to Sacramento from those in the trenches was loud, clear and unanimous: Starve the cities at your own peril.

Elected officials from five Westside cities banded together last week to tell legislators who represent the area that they cannot sustain the next round of budget cuts contemplated by the state without severe service cutbacks.

And the locals sought to sell the state officeholders on a partnership, rather than the usual tug of war over scarce resources. "We have to get past 'the cities versus the state,' " said Los Angeles Councilwoman Ruth Galanter. "We're all in this together."

The forum for the joint lobbying effort was a Friday meeting of the Westside Summit Cities, to which the legislators had for the first time been invited. State Sen. Herschel Rosenthal, Assemblyman Burt Margolin and Assemblywoman Gwen Moore, all Los Angeles Democrats, attended the two-hour session.

They were joined toward the end of the meeting by state Sen. Diane Watson (D-Los Angeles). State Sen. Tom Hayden (D-Santa Monica) and Assemblyman Terry Friedman (D-Brentwood) sent aides.

The Westside Summit Cities members--Los Angeles, Santa Monica, Beverly Hills, West Hollywood and Culver City--were represented by a combination of their mayors and city council members, who told their Sacramento counterparts that they are already at their wits' end to come up with revenue to run their cities.

"Santa Monica has raised every tax we can figure out and we'll raise them even more if we have to, but we're almost at the end of what we can do," Santa Monica Mayor Judy Abdo said.

The local group suggested it was time for state lawmakers to take the unpopular step of raising income or sales taxes at the state level. The city officials argued that deep cuts in local services are equally unpopular, and they said they were no longer willing to let the legislators escape the blame for such cuts.

Among the suggestions offered on behalf of the group by Beverly Hills Councilwoman Vicki Reynolds: Keep the half-cent sales tax and split the property tax rolls so rates on commercial properties can be increased.

Reynolds also asked the state to relieve the cities from needing a two-thirds majority to pass bond issues and parcel taxes and to change a state law that prohibits cities from levying business license taxes on financial institutions.

If the city officials sought to put the state legislators on the spot, the legislators had a villain of their own to blame: Gov. Pete Wilson and his influence on Republican legislators.

"The governor has dug his foot into the ground and said there will be no new taxes," Moore said.

Wilson's 1993-94 budget proposal recommends a major cut in revenue to the cities in response to an anticipated $8-billion state budget shortfall.

"You're fighting against a Draconian sweeping away of your major revenues," Margolin said.

The fight for local revenues began with the passage in 1978 of Proposition 13, which severely cut property tax rates, the main funding source for local governments, leaving them 60% shy of their prior funding.

Since then, the state has lessened the financial blow to cities and counties by shifting some property tax revenues from schools to cities, while funding schools out of other state funds. Now, the plan is to shift about $2.6 billion back to the state coffers.

The League of California Cities has estimated the shift would cost cities 22% of their property tax revenues.

Faced with shrinking funding, the cities have over the years found ways to raise their own operating expenses by creating or raising local taxes on utilities, business licenses and hotel occupancy. Another source of local revenues has been escalating fines on parking tickets and fees for services such as rubbish collection.

"I don't understand why it is when we go the state, taxes are never on the table," said Los Angeles City Councilman Zev Yaroslavsky. "But when we need to cut, all we can do is tax more or cut (staff or services)."

Yaroslavsky said that if the state budget cuts of $350 million for Los Angeles go through on top of an expected $200-million shortfall from the recession, he would recommend the city go into receivership and become a ward of the state.

"Let you decide which potholes to fix," he told the state lawmakers.

Though the smaller cities' projected shortfalls contain fewer zeros, they are no less devastating, their officials said.

Speaking for Culver City, Councilman Mike Balkman said the city had last year raised fees and taxes while cutting 40 staff positions and turning off every other street light on major thoroughfares to save on the light bill.

This year's cuts could mean an end to crossing guards and a school drug prevention program, along with increased paramedic fees, Balkman said.

Faced with a 12% cut in the general fund budget this fiscal year, Santa Monica cut 60 staff positions and virtually eliminated its capital improvement programs, Abdo said.

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