State Adopts Budget
The State now has a Budget for Fiscal Year 2010/2011 and the immediate impacts on the City are relatively minor. The solution may not provide long term stability. As noted by the Legislative Analyst Office (LAO) the final solution assumes $5.4 billion in Federal Funds which have not been appropriated and $2.7 billion in one time loans and revenue shifts. The Budget package did include State Pension plan modifications which will provide some fiscal relief on state spending in the long term. There will also be Constitutional Amendment placed on a future statewide election for approval by the voters. The measure is intended to increase the State’s budgetary reserves and stabilize the financial obligations over time. The measure would increase the maximum size of the existing Budget Stabilization Account from 5 percent to 10 percent.
CITY IMPACTS
Delay In Gas Tax Payments
Consistent with previous proposals the Budget delays the payment to cities of local gas tax revenue. The City has adequate cash flow for the current year, however, as local expenditures of gas tax occur this may have impacts in the future.
Additional Surcharge On Parking Citations
One of the Budget trailer bills levies an additional $3.00 fee on all parking citations to be transmitted to the Trial Court Trust Fund. This fee is in addition to the $4.50 currently in statute to fund court operations. Staff will be evaluating the fees established in Dublin for parking
citations and the impact of the additional surcharge. The parking surcharge goes into effect 60 days after the budget has been signed and sunsets on July 1, 2013. Cities are required to transmit the $3 for every citation collected to the county treasurer on a monthly basis.
Redevelopment Agency
Although Dublin does not have a Redevelopment Agency, those cities which do are once again required to help fund the State Budget with a direct transfer of local funds.
Possible Securitization of State Mandated Cost Obligations
The State has deferred making payments to local agencies for State Mandated cost claims. The budget package had a provision for a joint powers agency to issue 10 year bonds to finance the current $1 billion owed over 10 years. The State would only pay up to 2 percent interest and the local agencies would need to finance the cost of the debt issuance.
The future may require additional measures. The analysis report issued by the LAO stated, “We estimate that well over two-thirds of the Legislature’s 2010-11 budget solutions are one-time or temporary in nature. This means that California will continue to face sizable annual budget problems in 2011-12 and beyond.” City of Dublin Staff will continue to monitor developments and fiscal trends.