Coastal voices: Keep state away from local revenue

My fellow Crescent City Council members and I are gravely concerned about the state budget stalemate gripping the Legislature.

Year after year we watch our state leaders attempting to bring the pieces of the state budget together without ever doing the dirty work of real budget reform.

This year is no different, and it is disturbing that not even four years after the voters passed Proposition 1A imposing restrictions on the state's ability to take local money to close the state's budget gap, this irresponsible option is again on the table.

Crescent City and California's other 479 cities cannot continue to be the state's credit card to borrow on when times are tight.

As local elected officials, we face many of the same budget challenges as our state colleagues. The downturn in the economy has dramatically stalled sales tax and property tax revenues and rising energy costs are a great burden on city budgets. These factors have required cities to cut spending, raise additional revenues and focus on the basics of local government. Frankly, elected officials only have two serious options when times are tough—cut spending or increase revenues.

Crescent City has now had to make program cuts and delay projects because of a shortfall of revenue sources.

California cities are still paying for the years that the state regularly took city and redevelopment property tax funds instead of making tough budget choices. The state then took transportation sales tax money, deepening the impacts locally. Every time the state took from us we were forced to defer maintenance and cut programs, straining city services and responsibilities—streets, parks, public safety and libraries, and our residents suffered.

As the state took from cities to maintain or expand its spending, we were forced to shoulder deep budget cuts and tax increases that should have been the responsibility of the state.

Gov. Arnold Schwarzenegger stood in 2004 with local government leaders and the people of California to end the reckless practice of taking local revenues. He spoke loudly, saying that the state had to stop taking local government funds to solve its budget problems.

Prop. 1A passed with support from 84 percent of voters, giving a clear mandate that local revenues should be left locally, not continuously highjacked by the state. Two years later a second measure to protect transportation funds was supported by the governor and approved by 77 percent of the voters. The message of these two votes and an earlier one concerning redevelopment funds in 1952 was clear: Leave local funds local and use transportation funds for transportation.

Prop. 1A allows the state to borrow from local governments only in a "severe state of fiscal hardship." Today's situation doesn't qualify as that; it's a structural deficit that the state must face through a balanced approach which cuts spending and raises revenue. Both the governor and the Budget Conference Committee have produced budgets that do just that.

The Legislature isn't facing a "severe state of fiscal hardship" as much as a lack of political will and leadership. We want our state leaders to be honest with Californians—solving this budget crisis requires sacrifice from everyone.

We appreciate the fact that the governor has continued to stand with cities, protecting local revenues and transportation funds from future raids. He said in April on national television that the state can't steal money from local governments or transportation any more when it runs out. That is what the voters have said they want. That is as it should be.

State leaders need to understand that borrowing their way out of a financial hole doesn't address the real problem and is downright irresponsible. It also fails the acid test of leadership: to leave the state to balance its budget on the cities', counties', special districts' and districts' funds.

This practice must stop once and for all if we have any hope of rectifying California's structural problems and rebuilding our Golden State. Local funds should stay local, and the state should balance its budget with state funds.