Although it’s still uncertain what the exact impact will be to the city of Dublin, it appears as if the budget about to be adopted by the State of California will have negative effects on local governments throughout the state. I have included information below on some of the general terms, and I will post additional information as it becomes available. Due to the state raid of our city’s local funds, the Dublin City Council will likely need to make additional adjustments to its adopted budget at our August meeting. The following was issued from the State of California:
STATE BUDGET UPDATE
July 20, 2009
The Big Five has agreed to a deal on the state budget tonight and will send it to their respective houses for a vote expected on Thursday. As of now there is no specific language written for the budget so all we have to go on is the basic framework as outlined by our Legislative Director Dan Carrigg and media reports. The language and details of the budget will be out for Here is what we know so far:
There are a total of $14 billion in social services cuts although the state’s welfare to work CalWORKS program and the Healthy Families health insurance program avoided outright elimination.
- Corrections gets $1 billion in cuts, but the agreement does not include release of inmates, though the governor retains the authority to order inmate releases.
- There are no new taxes in the budget. Revenue enhancements for the budget came from accounting shifts and a LOAN OF NEARLY $4 BILLION FROM LOCAL GOVERNMENT.
- Three monthly furlough days for state workers appear to be in place through June of next year. Total Savings of $1.3 Billion.
- Budget reserve is expected to be $800 million to $1 Billion.
You can see the brief news conference from the Big 5 on www.sfgate.com. It is a good view to see how the Legislature and Governor do not grasp and/or address the impact our citizens will face as they balance over 15% of their budget problem by taking money from local government. At the end of the new conference Steinberg does address the impact to local government and the fact that we are “unfortunately” part of the solution. He does emphasize that on Proposition 1A we are going to be paid back for the money they take. Karen Bass had a more succinct description: ”Local governments unfortunately have to be partners in pain,” Bass said. “There was no way to close a $26 billion deficit through cuts alone.”
DIRECT LOCAL GOVERNMENT IMPACT
- A total of $1.7 billion in Redevelopment takeaways. This would include $1.350 billion in FY 2009-10 and $350 in 2010-11. The take away assumes that the Legislature cleans up the language from their last RDA shift that lost in court, but at this point it is in their budget. We have not seen specific language at this point that would demonstrate how this take would pass the test set out in the latest law suit won by CRA, but at this time the shift remains in play for the next two years.
- The media accounts point to a Proposition 1A and HUTA transfers totaling $3.1 billion ($2.1 billion in borrowing by suspending Proposition 1A and $1 billion in transfers from local gas taxes. However from what we understand there is a proposal to allow this to be removed if an RDA securitization proposal is enacted across the state. this proposal would create a trade off of future revenue for an extension of the project area lifetime. If this secrutization plan allows the state to generate $3 billion in revenue then HUTA and Prop 1A will not be triggered. We have not seen specific language on this program, but rumors have been floating in the capital for the past week that this may happen. As soon as we know what the situation is we will make the language available.
- If there is not enough participation to securitize the $3 Billion in new revenue then the Budget would include the $2.1 Billion shift of local property taxes as established by Proposition 1A and a $1 Billion shift from HUTA. The vote to shift HUTA funds as a majority vote special session bill, which means it will not take effect for 90 days after the conclusion of the special session. This will allow the bill to go up with only Democrats voting for the bill.
- As part of the package there will be some additional tightening to the Prop 1A securitization language, including increasing repayment priority. This is intended to facilitate short term bridge loans for local government.
Tags: Budget Info. by Tim Sbranti
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