Cities Grimly Speculate on a State Raid of Local Budgets : Government: Officials say communities could lose up to $28 million. The Legislature is trying to close an $11-billion gap in income and expenses.

Cities around the San Fernando and Antelope valleys were conducting a grim deathwatch on their own budgets Monday as they waited to hear whether the state would raid local treasuries to close California’s huge budget deficit.

Proposals to take away the cities’ share of vehicle license fees and bailout money intended to offset the effect of Proposition 13--two plans said to be under discussion by Gov. Pete Wilson and legislative leaders--could cost local governments up to $28 million, local officials said.

City officials from Burbank to Lancaster used words like “catastrophic” and “devastating” to describe the impact on local governments, which receive most of their funds from the state.

In many cases, the cities have already cut their budgets to deal with the continuing recession. Further cuts--Glendale alone has $9 million at stake--could not be absorbed without layoffs and the elimination of essential services, local city officials said.

Assurances from state legislators have not stopped the local hand-wringing.

Agoura Hills City Manager David Carmony said he contemplates eliminating the city’s parks and recreation department. The parks department has 40 full-time employees and funds a variety of programs at the city’s five parks, from the summer Concert-In-The-Park series to archery and tennis classes.

“I don’t know where else we’d go” to absorb the $720,720 cut the city might face, he said.

Glendale Mayor Carl Raggio said, “These figures are disastrous. It’s a little more than 10% of our budget.”

Several city leaders said the legislative working group trying to close an $11-billion gap between income and expenses in the state budget is looking to get $1 billion by reducing the cities’ share of state funds.

One proposal under consideration would reverse the state bailout that helped cities and counties survive the property tax cuts enacted by Proposition 13. The bailout shifted a portion of property tax revenues to the cities from public schools.

But Assembly Speaker Willie Brown last week was critical of local governments for depending on the state’s bailout money over the years.

“We should never have bailed out local governments,” said the San Francisco Democrat. “They become like heroin addicts. You have to keep feeding them.”

Glendale’s Raggio was angry about those remarks. He said the cities have done a better job of keeping their fiscal houses in order than state lawmakers.

“Who the hell is he?” Raggio asked. “He has no right to say that because cities have been forced to underwrite Sacramento all this time.”

The second proposal under consideration would transfer all or part of $894 million in annual vehicle license fees from the cities.

Altogether, the Proposition 13 bailout money and license fees add up to about $1.7 billion for the cities statewide, officials said. The final budget package may not take all of both.

“I don’t know where we’re going to get blindsided, but we’re going to get it,” Raggio said.

Sen. Frank Hill (R-Whittier), vice chairman of the Budget Committee, said the fear is an overreaction to a range of proposals under discussion, and blamed the League of California Cities for stirring the panic. The league last week issued a four-page list of how much money each city receives in Proposition 13 bailout money and vehicle license fees.

As a result, local government officials are “swarming the halls” of Sacramento this week fearing they will lose all that money, he said.

Hill said it is still not certain whether $1 billion will be taken from the cities, or over what time period. One idea being tossed around, he said, is to take $200 million each year for five years. The cities, however, fear that the final budget arrangement will hit them hardest.

“They’ve totaled up all the options and said the state is going to take these away,” Hill said.

After Glendale, Burbank stands to absorb the most serious blow in the budget talks, with $6 million at stake in the two funds.

“This year, we’ve already had to cut $6.8 million before we were faced with the state’s fiscal problems,” said Steve Helvey, assistant city manager. “We have reduced services and asked employees to accept salary freezes. Another $6 million is unthinkable.”

He said that amount of money represents the salaries of 125 city employees, and is nearly twice the size of the budget for the three-branch city library system.

Santa Clarita receives no money from the Proposition 13 bailout because it is one of 72 cities in California that incorporated after the fund was established in 1979. But the city could lose $4.2 million if the state takes all the money from vehicle license fees.

“It would have catastrophic results,” said Ken Pulskamp, assistant city manager. “We would have to look at police and parks and recreation, everything.”

Though the total city budget is $54 million, only $28 million is available for discretionary spending, he said. The rest is committed to such things as transportation and community development in the poorer areas of town.

Lancaster and Palmdale also get no money from the Proposition 13 bailout, but were counting on $3.6 million and $2.9 million, respectively, in vehicle license fees.

Over the past two years, Lancaster cut its work force by 42 positions, said Nancy Walker, a spokeswoman for the city. Further cuts in state money could cost more jobs as well as the elimination of some parks programs.

The parks department is a major employer of local teen-agers during the summer, hiring about 100 of them.

“What do we do, let the parks return to the desert?” she asked. “It doesn’t take long up here.”

Effects of State Cuts on Cities

At stake for local cities in the budget debate, according to figures from the League of California Cities:

Vehicle Proposition 13 License Fees Bailout Money Agoura Hills $720,720 $0 Burbank $3,354,120 $2,699,586 Glendale $6,389,460 $2,375,687 Hidden Hills $63,756 $31,174 Lancaster $3,627,855 $0 Palmdale $2,917,530 $0 Santa Clarita $4,213,440 $0 San Fernando $814,275 $369,105 TOTAL $22,101,156 $5,475,552