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Schwarzenegger urged by mayors to spare cities

SACRAMENTO – The mayors of some of California’s largest cities on Tuesday asked Gov. Arnold Schwarzenegger to avoid undermining local governments as he and lawmakers seek to balance the state budget.

Los Angeles Mayor Antonio Villaraigosa led a group of mayors from San Diego, Sacramento and Fresno, who came to the Capitol to meet with the governor. They said the state should repay cities if it takes any of their tax revenue.

Under Schwarzenegger’s budget proposal, the state would borrow $1.9 billion from property tax collections and reduce the local share of the gas tax by $744 million. It’s part of a plan to close a $24.3 billion deficit in the fiscal year that begins July 1.



The mayors said taking gas-tax money would be worse than borrowing from property taxes because the state would not be obligated to repay it. The state must repay local governments within three years, with interest, if it borrows local property tax revenue.

“One of our core principles is that any plan that pulls tax revenues from cities must be accompanied by a plan to get that money back into the coffers of local governments,” Villaraigosa said during a news conference.




In addition to taking the gas tax from local governments, the Legislature’s budget analyst has recommended siphoning even more local money from gasoline sales. It’s unclear whether that proposal will be adopted by lawmakers.

San Diego Mayor Jerry Sanders said his city already has cut 18 percent from its $1 billion general fund. The state is threatening to take revenue worth another 7.5 percent.

He said the loss of the gas tax alone would mean 120 fewer police officers and 120 fewer firefighters for San Diego.

“We’re here to call on the legislators and to call on the governor to balance the budget without balancing it on the backs of cites, counties and school districts,” Sanders said.

Senate Democratic Leader Darrell Steinberg said Tuesday that lawmakers were working on a plan that would not require local borrowing.

While Schwarzenegger has proposed $16 billion in cuts and a $4.5 billion reserve fund, Steinberg said Democrats would counter with $13 billion in cuts and maintain a reserve between $500 million and $1 billion.

Reserve funds typically grow during years with excess tax revenue. California’s revenue has plummeted, forcing Schwarzenegger and lawmakers to consider deep cuts to education, health care, in-home support services, prisons and other core areas of state government.

“The purpose of a rainy day fund provide reserves for a rainy day,” said Steinberg, D-Sacramento. “It is thunder and lightning in California right now.”

The Democrats’ budget plan would prevent the elimination of health insurance for 1 million low-income children, welfare and college fee assistance programs, as Schwarzenegger has proposed.

Lawmakers face a deadline Monday to pass a budget bill and send it to the governor’s desk, a deadline they are likely to miss.


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