The loss could affect capital improvement projects such as Trancas Canyon Park, Legacy Park and the Malibu Library renovation.
By Rami Turayhi / Special to The Malibu Times and Olivia Damavandi / Staff Writer
Having already slashed $1.4 million from its 2009-2010 fiscal year budget in May, the City of Malibu stands to lose another $700,000 and myriad city services if the state decides to borrow $2 billion in statewide cities’ property taxes as part of a plan to address its $26.3 million budget deficit.
State lawmakers on Thursday will vote for or against the plan. If approved, capital for numerous Malibu projects relating to water treatment, computer updating, street improvements and park construction could be jeopardized.
“We’re going to go back and do a revised budget,” Administrative Services Director Reva Feldman said Tuesday in a telephone interview.
Feldman said the city is currently unsure which aspects of its 2009-2010 fiscal year budget will be sacrificed, but said the $700,000 cut could also affect capital improvement projects such as Trancas Canyon Park, Legacy Park and the renovation of Malibu Library, among others.
The plan, announced Monday evening by Gov. Arnold Schwarzenegger and California legislative leaders, proposes to generate $4.7 billion by borrowing or redirecting funds from local government entities across California. Two billion dollars would result from the state’s acquisition of 8 percent of cities’ property taxes, which must be paid back in three years time. Another $1 billion in transportation money traditionally earmarked for local governments would be slashed, and $1.7 billion is to be cut from local redevelopment agency budgets.
Malibu city council members last month adopted a resolution declaring that the proposed tax acquisition would create a severe fiscal hardship, as property taxes amount to one-third of the city’s revenue. The resolution was intended to support the League of California Cities’ efforts to prevent the state from collecting the taxes.
“As a member of the League of California Cities, we [the City of Malibu] are going to oppose that [the state’s plan to collect 8 percent of cities’ property taxes],” City Manager Jim Thorsen said last month in a telephone interview.
“We don’t feel it’s the right way to balance budgets,” he continued. “The cities are in dire straights as well, and we need to rightfully protect what is ours.”
Judy Mitchell, Rolling Hills Estates mayor and president of the League of California Cities, a nonprofit association that advocates on behalf of cities regarding state and federal government issues, in a press release called the proposed plan “irresponsible” and said it would have “disastrous, long-lasting impacts.”
“Cities are already reducing services due to the recession and can’t afford to cut public safety and other essential services to bail the state out,” Mitchell stated in the May 5 press release.
Many local government officials throughout California have expressed outrage at both the ongoing state fiscal crisis as well as the latest proposed budget plan, with more than 500 local officials gathering over the weekend in Sacramento to express their anger at the state government’s tendency to borrow from local entities in times of state deficit.
Some local lawmakers are even suggesting pushing for a constitutional convention in order to reformulate the relationship between state and local government in California. Under the current system, the state government controls much of the money designated for school districts, as well as a significant portion of the revenues meant for counties and cities. The power imbalance is skewed even further because of the legal consequences of a fiscal crisis for each entity: while state governments cannot declare bankruptcy under federal bankruptcy law, municipalities and cities can -and have done so in the past.
Though it includes a compromise to keep most state parks open for now, including most of the 220 parks initially scheduled to be shut down earlier this year, the proposed plan would strip more than $9 billion from California public schools (including the state university system). It would also allow oil drilling-for the first time in more than 40 years-to commence from an existing rig off the coast of Santa Barbara for an estimated revenue of $1.8 billion over time.
State worker furloughs are going to be extended until the end of the fiscal year in June 2010, reaping nearly $1.3 billion in savings. Another $1.2 billion is to be cut from state prisons, though it is unclear what part of the prison system will see the greatest reduction in spending. Most observers expect that thousands of prison inmates will have to be released early, a move that-coupled with already high rates of unemployment-could send crime rates soaring throughout California.