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Marsha McLean: State balances budget on backs of local government ... again

Live from City Hall

Posted: July 30, 2009 10:05 p.m.
Updated: July 31, 2009 4:55 a.m.
While Sacramento lawmakers are busy patting themselves on the back for finally passing their past-due annual budget, local governments throughout California are busy figuring how to absorb the new cuts to their budgets made by the state to achieve the state's "balanced" budget.

The new budget bills recently adopted in Sacramento reduce projected state spending by about $15 billion by cutting spending for California's most expensive programs including education, prisons and social services.

The new budget is also filled with accounting tricks that would do little to improve the state's poor credit rating. (California already has the lowest credit rating in the nation except for the commonwealth of Puerto Rico.)

One of the most distressing aspects of the new budget is the state's plan to balance its budget on the backs of local governments, taking $4 billion from municipalities statewide.

Part of the state's new budget plan is to borrow Proposition 1A funds (property taxes) from cities and counties, as well as to take redevelopment funds.

From Santa Clarita, the state wants an estimated $3.1 million in Proposition 1A money, and another estimated $1.3 million from redevelopment, for a total of $4.4 million.

Because of the leadership of the members of the League of California Cities and the support of the voters, the state can only borrow municipal funds, not take it outright.

We have to continue to fight for reform to make sure the state can pay this money back.

One of the things I am asked about the most by concerned residents is, "How is our city doing?"

Santa Clarita's plan to absorb this more than $4 million taking of funds is to reduce our contingency fund, reduce the amount we transfer to our facilities replacement fund and reduce our operating reserve amount.

Make no mistake - the reduction in the city's hard-won "rainy day" funds is definitely a hit - and one that is unsustainable year in and year out by the state to balance its so-called budget.

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.

One supervisor said Los Angeles County has enough money to last through October, and by then it plans to implement deep cuts to county programs.

But even if approved, the state's budget deal won't end California's financial problems.

It's been said that if each of us as families, local businesses and governments ran our finances the way the state does, we'd all have had to file for bankruptcy.

Year after year, the state has relied on gimmicks, borrowing and over-spending/taxation to get by.

Because of our city's prudent fiscal management over the years, we will survive the hit for this year.

Revising the state constitution, living within its means, getting rid of wasteful spending and bloat must be the highest priority in Sacramento.

If the state doesn't do something now to fix these problems, it will continue to find itself in the same (or worse) situation again within a few months.

Cities and counties throughout California adopt balanced budgets on-time every year. It's time for the state to do the same.

Marsha McLean is a Santa Clarita City Councilwoman. Her column reflects her own views and not necessarily those of The Signal. "Live from City Hall" runs Fridays in The Signal and is provided by the city of Santa Clarita.


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