Plans after failed props

GLENDALE — After voters overwhelmingly rebuffed five of six ballot measures Tuesday that would have reduced the state’s projected budget deficit of $21.3 billion to $15.4 billion, city and education officials in Glendale and Burbank are bracing for even deeper cuts to state funding and a possible raiding of their local tax dollars.

Under the shadow of Gov. Arnold Schwarzenegger’s proposal to lay off state workers, unload properties, slash education by more than $5 billion and borrow $2 billion from local governments, executives in both cities this week began tabulating the fallout of the failed measures.

Glendale would be out of a projected $4 million and Burbank $3.4 million under a proposal that calls on cities to loan the state 8% of their property tax revenues from 2008-09. The funds must be paid back, plus interest, to cities within three years.

“We all know that when the state braces for brutal cuts, we have to all run and hide for cover,” Glendale City Manager Jim Starbird told the City Council on Thursday.

As Glendale and Burbank continue to craft their 2009-10 fiscal year budgets in the coming weeks, Starbird and Burbank Deputy City Manager Justin Hess did not speculate further on what additional impacts the failed measures might have on the cities.

Burbank plans to work closely with the League of California Cities, which last week called the governor’s plan to borrow from cities “reckless,” saying cities could not afford to bail out the state when they are already adopting painful cuts to balance their own budgets.

“Part of our goal is to ensure that any actions by the state don’t hurt local government,” Hess said.

State agencies have already started instituting new charges for administrative services, officials said, and funding for grants will likely dry up until as a result of the sputtering economy and statewide budget picture.

The outlook for school districts is also grim. The governor proposed cutting education funding by $1.6 billion for the remainder of the fiscal year ending June 30, and by roughly $3.7 billion next fiscal year. State education officials are predicting more teacher layoffs, increased class sizes and fewer arts and music offerings.

“It truly is mind boggling the kinds of cuts we will have to make,” said Mary Boger, president of the Glendale Unified School District Board of Education.

The district stands to lose an additional $25.1 million over three years if legislators approve the worst-case scenario plans for solving the ballooning state deficit, administrators announced this week. The cut would be in addition to a projected $25.4-million deficit by 2012 that the district has already began working to close.

To weather the storm, Chief Business and Financial Officer Eva Rae Lueck walked the board through a three-year budget plan that relies on federal stimulus funds and reshuffling other dollars to ensure the district qualifies as being solvent according to state reporting requirements.

The plan, which involves cutting the district’s contribution to maintenance funds over three years by $12.6 million, and also utilizing $10.9 million in allocated stimulus money, would combine to give administrators an additional $23.6 million. Still, it would leave them short of covering the projected deficit.

Lori Ordway-Peck, chief business and financial officer for the Burbank Unified School District, said officials have no plans to rely on stimulus funding for next year’s budget, despite facing an additional $10 million in cuts over the next two years on top of the $13.1 million in expected losses over the next three years.

“We don’t want to go there,” she said. “The fear factor is justified. We know the state is hurting and we have had history with the federal government increasing money and the state using pieces of it here and there.”

Recent three-year projections that take into consideration the $13.1-million reductions show the district $90,000 in the black when including all of its reserve accounts, Ordway-Peck said. The board this month voted unanimously to lay off 34 teachers after agreeing to increase class sizes in some grades. The move is expected to save $1.6 million.

Board trustee Larry Applebaum said his colleagues would likely have to cut another $2 million to $3 million from next year’s budget.

“But when you’ve squeezed the towel dry,” he said, “how do you get more water out of it?”

In addition to increasing class sizes, freezing positions and renegotiating down teacher salaries and benefits in coming years, Applebaum floated the idea of putting a parcel tax on the 2011 ballot that would help pay for specific programs.

“We have to be proactive in our community,” he said. “I don’t have any great hope for solutions coming out of Sacramento that are going to be substantive enough to help us.”

 CHRISTOPHER CADELAGO covers Burbank City Hall. He may be reached at (818) 637-3242 or by e-mail at christopher.cadelago@ latimes.com.