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Cities Denounce Budget Deal

Black Voice News.com, News Report , Chris Levister Posted: Jul 23, 2009

Comparing it to a wrecking ball slamming struggling local governments Riverside Mayor Ronald O. Loveridge joined the California League of Cities Tuesday, in denouncing a state plan that targets city and county funds to help close the $25 billion budget deficit.

Loveridge an expert in local and state governance is set to take the reigns of the National League of Cities this fall. He said Riverside stands to lose an estimated $26-27 million dollars that will not be repaid by the state.

To balance the budget on the backs cities already struggling with deep revenue losses, foreclosures, layoffs and spiraling unemployment is unacceptable, said Loveridge.

This budget proposal is a reckless Ponzi scheme because it depends on unconstitutional seizure of billions in local revenues that the voters dedicated to specific purposes and questionable borrowing provisions, said Chris McKenzie, California League executive director.

It also puts governments most important responsibilityprotecting public safetyat risk because it takes local property tax revenues that should be used to patrol the neighborhoods of the cities of California and to respond to the many fire, police and emergency medical calls that cities in California receive. We have assured state officials we will see them in court the day after a budget is signed if it contains illegal provisions.

Even before the ink dried on the deal, a call went out from cities and counties across the state demanding that lawmakers vote against the proposal when it comes to the Senate and Assembly floor on Thursday.

More than two months of a tense standoff over ever-shrinking resources gave way late Monday to an agreement among Californias four legislative leaders and Republican Gov. Arnold Schwarzenegger to bridge a $26.3 billion gap between expenditures and the states plummeting revenues.

At press time lawmakers in both houses of the Legislature were poised to seal the deal $26.3 billion gap between expenditures and the states plummeting revenues.

At press time lawmakers in both houses of the Legislature were poised to seal the deal which allows the state to discontinue issuing high-interest IOUs to vendors, and stanch the decline of the states credit, which had two recent downgrades to near junk-bond status. Thousands lose health insurance The agreement included Democratic concessions of more than $14 billion in program cuts hitting the poor, children, the elderly and disabled while avoiding outright elimination of the states welfare-to-work CalWORKS program, and the Healthy Families health insurance program for children. The plan would end health care coverage for tens of thousands of seniors and children, cut several billion dollars in state assistance to local governments and possibly lead to the early release of thousands of prison inmates. It also would tighten requirements for welfare and other social programs and cut $2 billion from the states higher-education system and $9.5 billion from its public schools, which would lose thousands of teachers and staff. The entire state workforce, except forest-fire crews and the California Highway Patrol, would face a mandatory three-day furlough each month.

We have closed the deficit. We have protected the safety net, said Assembly Speaker Karen Bass, D-Los Angeles. Im very proud of what Democrats fought for.

Schools will take a $6 billion cut, but won a commitment to be paid back $9.3 billion in cuts from previous years. The agreement also cuts $2.8 billion from the University of California and California State University systems, $1.2 billion from the corrections department, and $1.3 billion from MediCal funding.

Schwarzenegger and Republican lawmakers were able to uphold their vow of no new taxes with a series of accounting shifts, borrowing and fund shifts. The state will extract $4.4 billion from

local governments revenues about $2.1 billion in borrowing by suspending Proposition 1A, $1.3 billion in redevelopment dollars, and $1 billion in transfers from local gas taxes.

Local governments unfortunately have to be partners in pain, Bass said. There was no way to close a $26 billion deficit through cuts alone.

Even one year of subverted gas tax would have devastating consequences on public safety and social services, said Loveridge. He said the proposal would devastate city services by stealing local gas tax and redevelopment funds, and borrowing property tax revenue when repayment is in doubt.

For example Loveridge said the city stands to lose $4-5 million in gas tax money that it wont see again. Another $10 million in redevelopment funds and $12 million in Proposition 1A funding are also expected to be taken by the state and repaid later.

Riverside uses gas taxes to maintain, repair and improve thousands of miles of roads and bridges. Plans to reduce the FY 2009-10 budget could result in the inability to meet contractual obligations, the need to issue stop work orders on construction, and could cause delay in completion of projects already in progress, creating safety/traffic hazards, said Loveridge.

As they have in the past, courts are expected to enjoin the state from implementing its unconstitutional raids of local gas tax, public transit and redevelopment funds. There may be a deal, but no solution, said Loveridge.

This is irresponsible and illegal governance.

Related Articles:

How Will the University of California Survive?

Businesses, Poor Take Hit as California Issues IOUs

Puncturing Old Myths About Californias Budget Woes

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