Los Angeles area could lose $300 million to state budget balancing
Los Angeles and other California cities and counties could see more than $2 billion in revenue stripped away by the state under a Schwarzenegger administration plan to trim a ballooning new budget deficit.
Administration officials Tuesday released a draft of the plan, expected to siphon more than $300 million from the city and county of Los Angeles, just two weeks before a special election on several ballot measures the governor is pushing to help balance the state’s books.
If those propositions fail, the state would probably see a nearly $6-billion hole carved in a 2009-10 budget that is already facing a big deficit because of plummeting tax revenue resulting from the economic downturn, state finance officials say.
Release of the document comes as backers of the ballot package -- Propositions 1A-1F -- are playing up potential dire consequences if the measures flop in the May 19 special election. The Yes campaign recently began airing a TV commercial featuring a Los Angeles firefighter warning of potential cuts in police and fire protection if the measures go down.
With public opinion polls indicating all but one of the measures failing, foes of the propositions say release of the two-page draft smacks of political opportunism.
“It’s showing the signs of a desperate campaign,” said Jon Coupal, president of the Howard Jarvis Taxpayers Assn., which opposes the measures. “What used to be a positive message has become blood in the streets. People don’t buy it.”
But local government officials said the proposal to cut $2.006 billion from cities and counties would wreak havoc.
“This is a real thing,” said Dan Wall, Sacramento lobbyist for Los Angeles County. “The risk we face in L.A. County is serious and it’s potentially large.”
Judy Mitchell, mayor of Rolling Hills Estates and president of the League of California Cities, in a prepared statement called the proposed cuts “irresponsible” and said it would have “disastrous and long-lasting impacts.”
She said cities are already slashing services because of the recession and cannot afford to cut public safety and other services “to bail the state out.”
The city of Los Angeles stands to lose more than $67 million, according to the two-page draft proposal. The county, meanwhile, could be particularly hard hit, by some estimates potentially seeing $250 million or more drained away to help the state balance its books.
Cities and counties would probably have to increase layoffs of police, fire, public heath, recreation and other workers, according to the draft.
Schwarzenegger’s proposal would allow the state to borrow property tax revenue but require it be repaid within three years. Counties and cities could take out loans on Wall Street to ease the effects, but such borrowing is difficult and costly in the current economy.
The proposal to tap local governments is one of several contingency plans the governor’s finance department is weighing to balance the books. Planned cuts for the state’s prisons and schools are expected to be released in the coming days.