Cynicism and contempt. Isn't there anything new from the state's budget mismanagers?
Not judging by what local government leaders heard from Gov. Arnold Schwarzenegger on Monday. He told them to brace themselves for more. He said that he plans to release two summaries of his budget today. One optimistically assumes that the budget propositions on Tuesday's ballot will pass (something that is increasingly unlikely). The other -- based on defeat at the polls -- will contain, among other nasty surprises, a forced loan from cities and counties to the state for 8% of their property tax revenues.
According to the League of California Cities, L.A. would be forced to loan the state $67.7 million. The county would be particularly hard hit, giving up as much as $250 million. The overall impact on local government -- and your neighborhood -- is estimated at just over $2 billion.
Taking 8% of the property taxes now used to fund local governments would force deep cuts in the services and programs delivered by your city and county. Worse, a property tax shift fixes nothing. The state is obligated to repay the local governments -- with interest -- in three years. That just kicks the state's deficit down the road. This might make cynical sense for termed-out legislators and Schwarzenegger. But the state will have dug itself a deeper hole from which it's less likely to recover.
Forced lending is a provision of a proposition voters approved in 2004, which was supposed to stop the state's dipping into the funds for city and county services. Between 1991 and 2003, the state budget had shifted more than $40 billion from cities, counties and redevelopment agencies to pay for state programs. Voters who overwhelmingly supported curbs on extractions from local governments probably thought they had put a firewall between their neighborhood and the cynical and contemptuous authors of the state budget. It turns out that the wall of separation is dangerously porous.
Taking from local governments comes at a time when they are struggling to cope with the lower property and sales tax revenues that have come with declining property values and curtailed spending.
My city has budgeted carefully, put reserves aside for rainy days and taken care to keep programs and services in line with revenues. We thought we might be lucky, that fiscal good sense would get us through these tough times. Our reward is the state's indifference.
