Put Everything on the Table : State revenue collapse puts new pressure on local governments to think imaginatively

That real pain and suffering will result from the budget approved this week in Sacramento is now sadly self-evident. We see the raw edges now: cuts in aid to the poor and disabled, to schools, to health-service providers, to cities and counties, libraries and universities. In short, to virtually every agency and individual that depends upon state funding.

But if there is any small silver lining to this state’s continuing economic agony, it is the evidence of a growing resolve by lawmakers at the state and local level to think more pragmatically, and even imaginatively, about new sources of revenue for underfunded government services. Recent steps to allow more flexible use of revenue generated by the Port of Los Angeles and the Los Angeles International Airport are two welcome cases in point.

The port, an independent city agency, has an annual budget of $457 million and is the largest in the nation. State law has precluded cities from using money generated by the ports for their general funds. But Los Angeles, like other California cities, now faces the likelihood of imposing further cuts on already strapped general fund services, such as police and fire, in order to meet state budget mandates.

To help ease the pain a bit, the Legislature has approved a special bill as part of the final budget package that would allow cities to use up to 25% of their port’s surplus funds for general fund purposes. Gov. Wilson has promised to sign that bill. That could mean an additional $44 million this year to help support stretched city police and fire services here. By itself, this change won’t solve the budget problem, but it will help considerably.

Action on the port follows the City Council’s first halting steps earlier this summer to untie a much denser knot that has tightly bound the use of local airport revenue. A web of federal and local restrictions that served LAX in its tenuous infancy by preventing other city departments from raiding airport coffers has now outlived its usefulness. The airport, the third-biggest transportation hub in the world, is thriving, but city services that depend on the general fund are struggling.

That’s why the City Council voted to put on the November ballot a charter amendment that would allow other city agencies to use surplus airport funds. Voter approval is necessary, but that alone won’t be sufficient. Before the charter amendment could take effect, the council must also vote to untie other knots in LAX finances and Congress must loosen restrictions on the use of federal airport money.

If nothing else, California’s continuing budget drama should serve to increase the pressure for these wise and long overdue budgetary reforms.