Just in case the vehicle license fees are not returned to the city, staff has prepared a pared-down budget.
By Anthony York/Special to The Malibu Times
If Gov. Gray Davis’ budget vision is implemented in Sacramento, most Malibuites can expect to pay higher taxes to register their cars at the DMV. And if the city has its way, much of that car tax money will be sent back to Malibu and used to build a new $8.5 million city hall.
While Davis’ revised budget proposal elicited howls from Democrats and Republicans alike in Sacramento, the new budget numbers were met with cautious smiles in Malibu and other cities across the state. Under the governor’s plan to fill the state’s $38.6 billion deficit, the state’s vehicle license fee (VLF), or “car tax,” would revert back to 1998 levels, yielding a $500,000 windfall for the city’s coffers. Currently, the city receives $250,000 in VLF funds. The $500,00, if returned to the city, would bring the total to $750,000.
“We’re cautiously optimistic that it restores the VLF, but everybody is cautioning us to be circumspect,” said City Manager Katie Lichtig. “The negotiations are hot and heavy even as we speak, and you never know until the deal is actually signed.”
Indeed, the annual May revision of budget numbers marks the official beginning of budget negotiations in the Capitol, and just because the governor has proposed something certainly does not make it so.
Davis’s revised budget reflects the harsh criticism that his January budget received from members of both parties. Democrats did not like the proposed spending cuts in the plan, and Republicans did not like the tax hikes, so Davis made efforts to accommodate both sides.
Among the largest concessions was adopting a deficit-spending plan similar to one proposed by Sacramento Republicans that would borrow more than $10 billion against current revenues, to be paid off by a temporary spike in the state sales tax. And while there continues to be big debate about whether or not the governor’s proposed half-cent sales tax increase will ultimately become law, Sacramento insiders seem to think the VLF hike is a done deal.
The City Council, however, is still preparing for the worst. In their proposal for the 2003-04 budget, Lichtig said city staff has been using doomsday numbers, assuming the worst possible budget outcome, and assuming that the $500,000 in vehicle license fee money would not be coming in.
“Staff has proposed a budget that assumes we’ll lose the VLF. We believe it’s a more prudent approach,” she said. “The budget proposal that is before the council is assuming that we will not receive the VLF. Once it becomes certain that the VLF money is being restored, we’ll go back and reevaluate cuts that were made.”
In the midst of statewide budget calamity, Malibu is still investing in its future. Among the budget items that will be revisited is the amount of money Malibu puts aside for building city hall. Malibu has about $1.8 million in the bank for a new city hall facility. The total estimated cost of the project is about $8.5 million. During the 2002-03 fiscal year, the city set aside $375,000 for city hall, but in the 2003-04 budget proposal, the city has earmarked only $300,000 for the project. That money will likely increase if and when Davis and the Legislature reach an accord on a budget that raises the car tax.
Another area where councilmembers will likely take a second look is the proposed cut in the city’s General Fund Grant program. Those grants provide $100,000 to community organizations that provide services to youth and other groups in the community.
January’s dismal state budget projections forced the city to consider a 50 percent cut in the program, money that could be restored if and when the VLF hike becomes law in Sacramento.
As the state starts some serious penny pinching, Malibu will miss out on some money owed by Sacramento. Lichtig estimates that Malibu will lose up to $40,000 in money from state-mandated services provided by the city. Normally, the state reimburses the city for things like election costs and booking fees on arrests made inside the city boundaries. If the state defaults on those payments this year, it will bring the total back charges for such services up to $216,000, according to city figures.