City braces for potential cuts
CITYWIDE While it’s still too early to panic, local officials are concerned about the prospect of having to make cuts to the core services of education and transportation because of the state’s current budget crisis.
Gov. Arnold Schwarzenegger announced earlier this month that the state faces a potential budget deficit of $14.5 billion and proposed a spending plan that calls for across-the-board reductions in order to protect any one agency or service from severe cuts.
The proposal includes 10 percent reductions to nearly all General Fund departments and programs, boards, commissions and elected offices, except in cases where such a reduction is unconstitutional.
The governor has called an emergency session of the legislature to come up with a plan to bridge the gap, a difficult job considering California is already spending $400-$600 million more each month than it takes in.
Santa Monica officials said they will not know the full extent of the budget cuts until the legislature and the governor come to an agreement, however, they are paying close attention to what is happening in Sacramento and are prepared to make adjustments to their own budgets if necessary.
“We’re watching it closely and if something is proposed that significantly impacts us, we are going to be contacting our legislators to let them know about that impact,” said Carol Swindell, City Hall’s finance director, who is in the process of preparing reports for the City Council to consider as they draft a budget for the 2008-2009 fiscal year.
The most significant impact could be the delayed payment of the Highway Users Tax, which is a tax on gasoline. The governor has proposed delaying this payment for five months, which could create a cash flow problem for City Hall in the amount of $650,00 to $750,000, Swindell said.
Santa Monica receives roughly $5 million from the state, $2 million of which goes to the Big Blue Bus. City Hall uses $240,000 from the state to fund library services.
Another $176,000 is used to pay for police as part of the Citizen’s Options for Public Safety program, and $12,000 is used to support street sweeping, Swindell said.
Another thing cities are watching is whether or not the state will use its ability to borrow property tax money under Proposition 1A, a measure passed by voters in 2004 that allows the legislature in times of emergency to borrow local property tax revenue for up to three years.
Property tax revenue represents about 13.6 percent of Santa Monica’s budget, or about $33.4 million during this fiscal year.
“But not all of that would be subject to (the law),” Swindell said. “It depends on what the budget impact is. It would essentially be borrowing that the state would have to repay … It’s something we are watching.”
When it comes to education, school officials are on edge given that education represents a large chunk of the state’s budget, said Jan Maez, chief financial officer for the Santa Monica-Malibu Unified School District.
“It would be difficult if not impossible for the state to solve its problems without affecting education in some way,”Maez said.“While we don’t know the impact yet, it’s never too early to start planning … We do hope the governor’s proposal is a worst case scenario.”
District officials are considering not filling positions which are currently vacant as a way to save money. They are predicting that under the governor’s proposal the district would have its revenue reduced by almost 2.4 percent in the current fiscal year and more come next year.
“We are looking at positions that are non-essential,” Maez said.“Obviously teachers would be considered essential … Our plan is to keep cuts away from the classroom and protect the children as much possible. Sometimes that’s not easy to do.”
Advocates for public education are using the possibility of budget cuts to urge voters to pass Measure R, which combines and renews two existing parcel taxes due to expire in the next few years. The funding is used to attract high quality teachers and fill budget gaps, supporters say.
“Measure R is local funding for local schools that can’t be taken by the state,” said parent and Santa Monica-Malibu PTA Council President Rebecca Kennerly.
“Our community has great schools because we’ve supported them in the past,” Kennerly. “If we relied only on the state, we wouldn’t have the great teachers and programs that we have today.”
When it comes to higher education, Santa Monica College Trustee Rob Rader said his colleagues are already having to make tough decisions to make up for $400,000 in cuts this fiscal year.
Trustees will look to do some “belt tightening,” Rader said, but the real pain will be felt next fiscal year.
“The governor’s proposal includes no cost of living adjustment, limiting growth to 1 percent and a 10 percent reduction in all categorical programs,” which includes those that reach out to lower-income students who may not be considering going to college because of the cost, Rader said.
“It’s troublesome to see the least powerful get cuts imposed on them,” Rader said. “I’m not saying we don’t all have to bare some share of it, but it’s disappointing when we can’t protect them more than we’ve been able to.”
Other programs that could be cut at SMC include teacher development and logistics, which is the study of the movement of goods, a booming industry in Southern California.
When it comes to transportation, Councilwoman Pam O’Connor, chair of the Los Angeles Metropolitan Transportation Authority board, is worried about funds being raided as they have been in prior years. The Exposition Light Rail Line to Santa Monica seems like it will keep its funding, but other projects that will help relieve congestion on the Westside and beyond may be in jeopardy.
The MTA lost $300 million last year, and if more cuts have to be made, there is no way the agency can expand to meet demand, let alone keep up with current needs.
“There’s been a history of the state taking money from transportation and then not giving it back,” O’Connor said. “We are monitoring the situation very closely. Everyone is worried, absolutely.”
Originally published in the Santa Monica Daily Press print edition on January 26, 2008. Read the original PDF.