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California State Budget Is Bad News for Local Governments
by Don Knapp
Yesterday’s California state budget compromise doesn’t bode well for cities and counties, which are losing funding to the tune of an estimated $3.7 billion because the state is borrowing their property and gas tax revenue. Already local officials are calling it a catastrophe-in-waiting.
The proposed budget further exacerbates the fiscal crisis facing cities and counties across the state, forcing local officials to make draconian choices to further cut -- and in some cases eliminate -- essential services and programs. A few highlights from the coverage are below.
From the Silicon Valley Mercury News article:
"We know it's bad news for our constituents," said San Jose Mayor Chuck Reed. While the exact amount of state money that would be borrowed from the city has yet to be worked out, Reed said the end result will be "cuts to services and reductions in jobs."
Last month, cash-strapped San Jose finalized an operating budget that included a freeze on wages and dozens of layoffs while also raising fees and closing several parks, including Alum Rock, on Mondays. A big state hit, however, would force the city to re-examine cuts the city council had rejected, including to police, fire and library service.
From the Wall Street Journal article:
Local governments, already reeling from their own budget crises, could stand to lose billions in the deal. "That would just be catastrophic," said Don Knabe, chairman of the Los Angeles County Board of Supervisors.
Los Angeles County's roughly $350 million "rainy day" fund stands to be decimated by the state budget cuts because it will be needed to replace the cuts being made to state health and human services programs, Mr. Knabe said. He said Los Angeles County has enough money to last it through October, and by then it plans to implement deep cuts to county programs.
From the AP article:
Paul McIntosh, executive director of the California State Association of Counties, called it the largest raid on local governments' coffers in state history.
