Cities React With Anger to State Cutbacks : Budget: They say a plan to strip $45 million from them and the county is the lowest blow in an economic double whammy.

City officials throughout San Diego County warned Tuesday that a budget-slashing plan in Sacramento would translate into dangerous cutbacks in every form of service, from police and fire protection to libraries.

Throughout the county, officials reacted angrily to the proposed budget, which would strip city and county governments of more than $45 million in the next year alone.

Many cities, already reeling from a recession that has severely cut their tax revenues and ability to raise money, see the legislators’ plan as the second and lowest blow in an economic double whammy.

“The state is trying to solve its budget problems on our back, it’s that simple,” San Diego City Manager Jack McGrory said. “We’re taking a double hit in San Diego. Our sales tax and property taxes and vehicular license fees are already way down and we’re feeling the impact already. And now this.”

Although Gov. Pete Wilson was threatening Tuesday to veto the budget plan that is on his desk, the cutbacks to city and county government are not part of the disagreement.

Officials said the cutbacks would come from two primary sources. The largest would be the loss of annual tax reimbursements that both the county and individual cities receive from the state to alleviate the impact of lost property tax revenues from the passage of Proposition 13 in 1978.

In addition, cities would suffer a one-time loss of redevelopment funds, which, some city officials said Tuesday, would bring some programs to a grinding halt.

McGrory said San Diego officials project the loss of $12 million in annual property tax reimbursements and a one-time loss of $5 million in redevelopment money.

According to a survey released Tuesday by the League of California Cities, a political lobbying arm, the city stands to lose $11.5 million in property tax funds and $2.5 million in redevelopment money if the legislators’ plans become law.

“We’re struggling on our own without this,” McGrory said. “We’ve already cut 200 jobs and we’ll obviously have to cut more. There won’t be any city service that won’t be affected, not police or fire or anything else.”

In San Diego, Mayor Maureen O’Connor has already asked city workers to accept a voluntary week off without pay and has approached several city unions to accept a 2% pay cut or face the prospect of across-the-board layoffs.

In addition, the county would lose $16.9 million in Proposition 13 tax subsidies under the proposed budget, officials said.

There are also a host of special districts throughout the county--from port districts and fire protection districts to cemeteries, flood-control and municipal water districts--whose losses under the budget plan could not be calculated Tuesday.

“Our problems are bad,” McGrory said. “But there are some fire districts that will simply not be able to function after they absorb these cuts.”

Countywide, officials were assessing the damage that would result from the tax and funding losses, from postponement of the proposed construction of a wellness center in Vista to raising city fees for some services in Carlsbad.

Contacted Tuesday, city managers from several San Diego County cities said they believe the cutback estimates released by the League of California--which are based on 1991 revenues--are low and that they are throwing even higher figures into their new budget equations.

Chula Vista City Manager John Goss said that while the proposed cuts are not enough to cripple his city, he still feels betrayed by state legislators.

“I resent the state trying to balance its budget on the backs of cities, counties and school districts,” he said. “We’ve all been suffering through this recession and their job no doubt has been a tough one.

“But it makes you second-guess the process in recent years, their going ahead with programs they just couldn’t afford,” Goss said. “And now we finally get to this, where we have to try and balance the budget in this manner, by taking money back from cities.”

Under the legislative plan, Chula Vista would lose $754,414 in annual state property tax reimbursements and up to $608,459 in the one-time loss of redevelopment funds.

Goss said the city has taken steps to help cushion the blow and does not expect to make immediate layoffs or cut programs. “Although it’s going to hurt us, this level of funding cuts we can live with,” he said.

“We’ll be forced to make some cutbacks in expenditures, but they will be things the public won’t be able to see as a scaling back of services--things like less travel and consultant expense.”

Goss said the city will also benefit from its “lean and mean” staffing approach. Chula Vista has the second-lowest ratio of employee to population in the county, at 5.5 employees per thousand residents, he said.

Chula Vista also has cash reserves of more than $9 million.

“But you can’t live off your savings forever,” Goss said.

In East County, El Cajon City Manager Robert Acker said he is waiting for official word from Sacramento before pushing any panic buttons.

According to statistics released by the California League of Cities, El Cajon stands to lose $398,007 in property taxes each year and $519,551 in redevelopment funds.

“Those numbers have been all over the ball field since the Legislature began talking about this thing,” Acker said Tuesday. “So I’m going to reserve judgment on our losses until I hear from them.”

Nonetheless, the budget news is not good news for El Cajon.

“In order to balance our budget this fiscal year, our city had to go to its reserves,” Acker said. “That’s $4 million gone from our savings. And so every dollar the state takes from us will add to that deficit. And that’s not good.”

In San Marcos, City Manager Rick Gittings called the cuts significant, especially those earmarked for redevelopment projects.

The North County city has a relatively small property tax base, and consequently stands to lose only $102,497 from its general fund. The city’s redevelopment money, however, could take a bigger hit with a loss of up to $1.23 million.

Gittings said the general-fund cut will result in some streets not being resurfaced this year as scheduled. Losing the redevelopment money will force the city to put on hold construction of major streets and storm drains that are needed in areas targeted for expansion.

San Marcos may also have to postpone planning for a wellness center that the City Council had given conceptual approval to build in conjunction with Palomar College. The project would have been funded with redevelopment money.

Christine Tsung, Poway’s finance manager, said the city had anticipated losing between $300,000 and $500,000 in property tax refunds from the state each year, so the $307,296 figure released Tuesday came as something of good news.

“We have been very, very conservative in budgeting,” Tsung said.

She said the city expects to be able to make up for the loss through small cuts in the $16.5-million general fund budget, such as in travel expenses, as well as through expected savings in their sheriff’s contract. The city has also instituted a hiring freeze.

“Yes, it will impact us, but it will not be detrimental,” Tsung said. “This is not something that we are taking lightly, but it’s something that we can manage without drastically cutting services.”

The cut in the tax increment funds also did not come as a surprise to Tsung, who said the city has reserved about $2.9 million from its redevelopment funds, more than twice the $1.4 million loss being proposed.

The same tune was being sung in Escondido.

The city had anticipated a loss of as much as $600,000 in property tax losses, so the $507,940 figure listed in the most recent proposal did not shock anyone. And Assistant City Manager Jack Anderson isn’t about to take the latest proposal as gospel.

“We haven’t decided for sure, because you can make multiple budgets and then you end up throwing away all your hard work,” Anderson said. “We have basically had a wait-and-see attitude.”

In Carlsbad, declining revenue from the recession has already forced the City Council to slash the budget by $6 million over the past 2 1/2 years. Now the state is cutting $1 million in property tax revenue and up to $250,000 in redevelopment funding.

City Manager Ray Patchett said Tuesday that city officials will begin meeting immediately to consider how to prune back municipal operations. That could mean reducing some services, reorganizing the staff or perhaps raising city fees.

“We’re going to be as creative as possible,” Patchett said.

Anticipating the state’s action, Carlsbad has placed a hiring freeze on 66 vacant positions, and now officials will decide how many posts must remain unfilled.

Oceanside has already been through an ordeal, hit not only by the recession but also by the deployment of more than 20,000 Marines from nearby Camp Pendleton during the Gulf War--military personnel who influence the city’s commercial well being.

The state’s spending plan would cost Oceanside $1.26 million in property tax revenue and up to $421,000 in redevelopment funding. The city has already laid off part of its work force and left jobs unfilled, including in the Police Department, to balance the last two budgets.

Now, although more cuts are coming, Mayor Larry Bagley was confident Tuesday that the city would somehow survive the state’s action.

“I feel confident we can do it without any major cuts in services,” he said. Part of the reason is Oceanside ended last year with more money in its budget reserve than expected, funds that will cushion the blow from Sacramento, he said.

Still, an assortment of expenditures will be cut, Bagley said, adding that even the city’s crucial redevelopment program can endure the revenue reduction. “There’s a lot of slack in that (redevelopment) department that can be taken up,” he said.

In Vista, where city officials have spent years reducing city services and operations because of revenue cutbacks, the news of further reductions was called unfair.

“Overall, they’re hammering us for almost $1 million,” said Frank Rowland, the city’s finance director.

“We’ve been cutting, slashing, burning and being resourceful and creative down here,” Rowland said. “The state would have been best served to do the same sort of effort up there.”

Rowland said 16 city employees, a number that represents 5% of the work force, were laid off this fiscal year as the city budget was reduced by $1.5 million.

The latest cutbacks will mean reducing any employee raises scheduled for the current fiscal year, as well as a reduction in the consulting services used by the city and some cuts in training and travel funds.

A shorter work week and layoffs are other considerations, Rowland said, adding, “Layoffs and position reductions would be lower on the priority list, but if required we may have to do that.”

The bottom line, some officials said, is that they feel insulted by the plan.

“What’s particularly offensive is that the state is interfering in the local government process; it’s the state saying their form of government is more important than ours is,” San Diego’s McGrory said.

“The long-term question is how long is the state of California going to go raiding its cities and counties, forcing them to make a tough decision--cut public safety and key services or raise taxes?” McGrory said.

“Who wants to make that decision any time,” he said, “but especially in the middle of such a deep recession?”

Times staff writers Len Hall, Jonathan Gaw and Ray Tessler contributed to this report, as did correspondent Richard Core.

Bad News for Cities

The state budget under consideration Tuesday afternoon would cut the funds that cities and special districts formerly received to make up for the loss of local revenue after Proposition 13 was passed in 1978.

CITY CUT IN FUNDS Carlsbad $1,089,535 Chula Vista 754,414 Coronado 503,896 Del Mar 101,183 El Cajon 398,007 Encinitas 774,220 Escondido 507,940 Imperial Beach 141,587 La Mesa 261,410 Lemon Grove 95,226 National City 171,161 Oceanside 1,265,758 Poway 307,296 San Diego 11,494,767 San Marcos 102,497 Santee 360,639 Solana Beach 161,213 Vista 474,379

Source: League of California Cities