Cities Say State Cuts Put Them on the Brink : Revenue: The next round of funding cuts will devastate services, local officials complain to lawmakers. An increase in the income or sales tax may be needed, they add.

The message to Sacramento from those in the trenches was loud, clear and unanimous: Starve the cities at your own peril.

Elected officials from five Westside cities banded together last week to tell legislators who represent the area that they cannot sustain the next round of budget cuts contemplated by the state without severe service cutbacks.

And the locals sought to sell the state officeholders on a partnership, rather than the usual tug of war over scarce resources. “We have to get past ‘the cities versus the state,’ ” said Los Angeles Councilwoman Ruth Galanter. “We’re all in this together.”

The forum for the joint lobbying effort was a Friday meeting of the Westside Summit Cities, to which the legislators had for the first time been invited. State Sen. Herschel Rosenthal, Assemblyman Burt Margolin and Assemblywoman Gwen Moore, all Los Angeles Democrats, attended the two-hour session.

They were joined toward the end of the meeting by state Sen. Diane Watson (D-Los Angeles). State Sen. Tom Hayden (D-Santa Monica) and Assemblyman Terry Friedman (D-Brentwood) sent aides.

The Westside Summit Cities members--Los Angeles, Santa Monica, Beverly Hills, West Hollywood and Culver City--were represented by a combination of their mayors and city council members, who told their Sacramento counterparts that they are already at their wits’ end to come up with revenue to run their cities.

“Santa Monica has raised every tax we can figure out and we’ll raise them even more if we have to, but we’re almost at the end of what we can do,” Santa Monica Mayor Judy Abdo said.

The local group suggested it was time for state lawmakers to take the unpopular step of raising income or sales taxes at the state level. The city officials argued that deep cuts in local services are equally unpopular, and they said they were no longer willing to let the legislators escape the blame for such cuts.

Among the suggestions offered on behalf of the group by Beverly Hills Councilwoman Vicki Reynolds: Keep the half-cent sales tax and split the property tax rolls so rates on commercial properties can be increased.

Reynolds also asked the state to relieve the cities from needing a two-thirds majority to pass bond issues and parcel taxes and to change a state law that prohibits cities from levying business license taxes on financial institutions.

If the city officials sought to put the state legislators on the spot, the legislators had a villain of their own to blame: Gov. Pete Wilson and his influence on Republican legislators.

“The governor has dug his foot into the ground and said there will be no new taxes,” Moore said.

Wilson’s 1993-94 budget proposal recommends a major cut in revenue to the cities in response to an anticipated $8-billion state budget shortfall.

“You’re fighting against a Draconian sweeping away of your major revenues,” Margolin said.

The fight for local revenues began with the passage in 1978 of Proposition 13, which severely cut property tax rates, the main funding source for local governments, leaving them 60% shy of their prior funding.

Since then, the state has lessened the financial blow to cities and counties by shifting some property tax revenues from schools to cities, while funding schools out of other state funds. Now, the plan is to shift about $2.6 billion back to the state coffers.

The League of California Cities has estimated the shift would cost cities 22% of their property tax revenues.

Faced with shrinking funding, the cities have over the years found ways to raise their own operating expenses by creating or raising local taxes on utilities, business licenses and hotel occupancy. Another source of local revenues has been escalating fines on parking tickets and fees for services such as rubbish collection.

“I don’t understand why it is when we go the state, taxes are never on the table,” said Los Angeles City Councilman Zev Yaroslavsky. “But when we need to cut, all we can do is tax more or cut (staff or services).”

Yaroslavsky said that if the state budget cuts of $350 million for Los Angeles go through on top of an expected $200-million shortfall from the recession, he would recommend the city go into receivership and become a ward of the state.

“Let you decide which potholes to fix,” he told the state lawmakers.

Though the smaller cities’ projected shortfalls contain fewer zeros, they are no less devastating, their officials said.

Speaking for Culver City, Councilman Mike Balkman said the city had last year raised fees and taxes while cutting 40 staff positions and turning off every other street light on major thoroughfares to save on the light bill.

This year’s cuts could mean an end to crossing guards and a school drug prevention program, along with increased paramedic fees, Balkman said.

Faced with a 12% cut in the general fund budget this fiscal year, Santa Monica cut 60 staff positions and virtually eliminated its capital improvement programs, Abdo said.

Proposed cuts for next year would affect library service and programs for senior citizens, youth and the homeless, she said.

Reynolds said Beverly Hills has reduced its work force by 10%, and the employees who are left have not received a cost-of-living raise for two years. Now the state wants to take back 16.5% of what’s left in the budget after paying for public safety expenses.

“This impacts on real people, real life, every day,” Reynolds said. “And it flows from us to you.”

In West Hollywood, the budget picture, despite service cutbacks, layoffs and higher local taxes, remains bleak, said City Councilwoman Abbe Land. City funding for one of the few homeless shelters that serves people carrying the AIDS virus is threatened, Land said.

Officials said the cities have taken repeated financial blows, while state legislators have been more generous with their own employees and state programs.

Using the state’s figures, the League of California Cities reported that while state, county and school employment is up over the last three years, city employment around the state is down by nearly 10,000.

Yet it is mostly the cities that provide services that make or break the quality of life for constituents.

“We are your shield,” said Councilwoman Jozelle Smith of Culver City. “If our funding is taken away, our constituents will turn to you for services.”

Although they were mostly sympathetic to their cities’ plight, the state legislators warned that with the size of the shortfall and the need to fund education and health care at the state level, the cities shouldn’t get their hopes up too high.

On the other hand, the legislators said the specific information provided on the impacts of cuts would be useful in Sacramento, where myriad competing interests lobby hard for money.

“When I’m ranting and raving on the floor, I always like something to wave around,” Moore said.

The legislators also offered some advice: Educate the public and get them aroused by what budget cuts to the cities mean to them. Rosenthal said the public’s perception about government spending is part of the problem.

“People do not believe that we have cut the fat out of government,” Rosenthal said. “They just don’t believe we have cut to the bone.”