Local coffers in decent shape after budget deal | TahoeDailyTribune.com

Local coffers in decent shape after budget deal

Gregory Crofton and Susan Wood

Though somewhat shortchanged again, Tahoe’s local government budgets survived negotiations by the California Legislature which ended Saturday with the governor’s signature of the $105 billion budget.

The budget, which incorporates bond costs, was led by an agreement between Gov. Arnold Schwarzenegger and cities and counties calling for the local governments to endure two years of revenue losses amounting to $2.6 billion.

In exchange, the state would need to follow stricter guidelines to justify further takeaways. The governor would have to proclaim “significant state fiscal hardship,” the League of California Cities wrote in an analysis released Sunday.

The League of California Cities calls the proposal-turned-budget a step down from the original demand the government association requested, but the situation could have been much worse, most say.

“We had an outright ban on taking local money. Here, there’s more flexibility, but it sets a criteria they’d have to meet,” League spokeswoman Megan Taylor said.

For starters, the state would be required to pay back the money with interest and limit its takeaways to twice in 10 years.

“I’m relieved and thrilled,” said Laura Gill, El Dorado County chief administrative officer. “My real fear was that the longer they talked about the budget, certain deals made would come unraveled. The assumptions we had made in preparing the fiscal year 2005 budget were consistent with what the governor signed.”

What Gill and many other county leaders were most concerned with was the prospect of continuing to lose local government funds to the state. The funds are generated from things such as property tax and sales tax.

El Dorado County’s 2004-05 budget year began July 1. Its preliminary budget requires $8 million in cuts and elimination of 40 of the county’s 1,800 jobs. The Board of Supervisors must finalize the budget by Oct. 2.

Like El Dorado County, the city of South Lake Tahoe has had to deal with uncertainty because of the state budget negotiations. The city is facing a 10 percent across-the-board cut in each department with a $3.1 million shortfall for the 2004-05 fiscal year starting Oct. 1.

City Manager Dave Jinkens estimated another 5 percent in reductions could have been imposed without the deal local cities and counties painstakingly made with the new governor.

“It’s certainly a milestone,” Jinkens said. “The big losers would have been the citizens.”

The Local Taxpayers and Public Safety Protection Act – an initiative designed to ban state raids of local government money – remains on the ballot. The League-sponsored initiative changes the constitution to mandate the money stay in city and county coffers.

For this year’s state business, Sen. Rico Oller, R-San Andreas, and Assemblyman Tim Leslie, R-Tahoe City, split their votes on the passage of the budget – no and yes, respectively.

“I don’t trust that the local government deal is going to protect cities and counties in the future. Any deal done by the state legislature can be undone, including this one,” Oller said.

Leslie had a more favorable view of the budget, despite the massive borrowing necessary to make ends meet and the lack of structural reform to ensure they continue to do so.

“This budget isn’t perfect, but then again, it took five years of waste, fraud and abuse to get us the huge deficits we have,” he said. “The important thing is that it protects local governments.”

The California Superintendent of Public Instruction was less enthusiastic about a budget he calls fulfilling the “status quo” for state schools.

“Our schools sacrificed more than $2 billion of the amount guaranteed them by the state constitution under Proposition 98. That sacrifice lowers the funding to schools for several years to come,” Jack O’Connell said.

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