Bill Would Restore $700,000 to Budgets of Small Cities

A state senator who is seeking to reverse what has been called a legislative “goof” is pushing a bill to restore at least $700,000 to the budgets of Lakewood, South Gate, Signal Hill and about 17 other small cities in Los Angeles County.

As part of the overall state budget compromise worked out last summer, the Legislature--perhaps inadvertently--took away the money earmarked for smaller cities that levy relatively low property taxes.

Now, Sen. Robert G. Beverly (R-Manhattan Beach) is seeking to restore the funds to these cities to use for police and fire protection, as well as other vital services.

Beverly, whose district includes Long Beach, voiced optimism that his bill would be enacted into law as long as it does not get “bogged down with other bills” dealing with local government finance issues.

But with the state facing a potential $10-billion budget deficit, several legislative sources warn that lawmakers might be reluctant to help out the small cities at the same time that they are faced with the prospect of slashing welfare, education and other programs.

At issue in the Beverly bill is whether the Legislature, despite mounting financial woes, will live up to a bargain reached nearly three years ago with the smaller cities.

In 1988, the Legislature approved a funding package designed to address the way trial courts are financed. It provided more than $200 million in extra state money to counties, financed 109 new judgeships and provided a windfall to cities that levy little or no property tax.

As part of the political maneuvering that surrounded the funding package, the Legislature linked the unrelated issues of trial court funding and aid to smaller cities. Specifically, the Legislature directed counties receiving the trial court funds to gradually shift some property tax revenues to the smaller cities.

But last summer, faced with a $3.6-billion budget deficit, the Legislature tinkered with this complex formula, reducing by 10% payments to counties for trial court costs. In turn, lawmakers sought to decrease the amount of property tax revenues being shifted from counties to smaller cities.

A wording mix-up resulted in the law’s cutting the cities’ property tax revenues by significantly more than was envisioned, according to supporters of Beverly’s bill to restore the funds.

The supporters of Beverly’s bill blame the funding cut on the last-minute way the budget was cobbled together. An accord on the spending plan, which was a record 28 days late, was complicated by continuing ill will between Democrats and Republicans, and was resolved only after Republican Gov. George Deukmejian agreed to a number of tax-increase and spending-reduction bills.

In a rare admission, a Senate committee analysis of Beverly’s bill acknowledges that the budget measure contained several errors because it was “conceived in desperation and drafted without the usual legislative review.”

“No one intended for that (the funding cut for smaller cities) take place,” said Joe Gonsalves, a former Norwalk area assemblyman who is now a lobbyist for Lakewood and a number of other low-property tax cities.

Gonsalves said it would be unfair to single out low-property tax cities for such a large budget cut. “If you’re going to do it to Lakewood, you might as well do it to Los Angeles, too,” he said.

Statewide, about 70 cities could get money pumped into their treasuries if the Beverly measure becomes law, according to legislative aides. There are no estimates available on the statewide financial effect of Beverly’s bill.

In the Southeast and Long Beach areas, however, the Beverly measure would restore about $73,000 to Lakewood; $57,000 to South Gate; $30,000 to Signal Hill and between $6,000 and $7,000 to Bell Gardens.

Other area cities affected by the proposal include Bell, Hawaiian Gardens, Montebello, Santa Fe Springs, Signal Hill and Vernon. But officials for these cities, when contacted last week, were either unaware of the Beverly bill or unable to estimate its financial impact on their cities.

Under the Beverly bill, the big winner in Los Angeles County would be El Segundo, which would get an estimated $506,000.

The Los Angeles County Board of Supervisors, which would have to give up the property tax revenues, has not yet taken a position on the Beverly bill.

However, Daniel J. Wall, a lobbyist for the County Supervisors Assn. of California, said his group will oppose the Beverly measure unless it is revised to also correct some other mistakes in last year’s budget bill, including provisions that took other funds away from counties.

Wall also predicted that the Beverly proposal measure could face “a lot of difficulty” because of the looming budget deficit.

A Senate aide familiar with the issue also said Beverly faces an uphill fight because of the state’s mounting financial problems. “Every dollar counts and we can’t give any more away and we’re $10 billion in the hole,” said the aide, who asked not to be identified.

The source also questioned whether the provision taking money away from low-property tax cities really was an error. He said that in the fast-paced and intense negotiations that paved the way for the budget compromise, “usually someone’s ox gets gored.”