> ## Content Index > Fetch the complete content index at: https://www.smdp.com/llms.txt > Use this file to discover other available public pages before exploring further. # City officials wary of state budget cuts - URL: https://www.smdp.com/city-officials-wary-of-state-budget-cuts/ - Published: 2005-02-01T16:00:00.000Z - Updated: 2026-10-23T06:03:10.000Z - Author: Guest Author - Tags: Government & Politics, Santa Monica, #archive-import *Prop. 1A to provide some protection for local funds* *By KIM CALVERT Special to the Daily Press* CITY HALL — Officials here are bracing themselves for what Gov. Arnold Schwarzenegger’s proposed state budget cuts will do to city coffers, but a voter-approved measure should provide some level of protection. Passing with a margin of 84 percent last November, Proposition 1A significantly restricts the state’s authority over local government finances. It prevents the state legislature from taking local tax dollars that municipal governments need for fire and paramedic response, law enforcement, health care and other vital services. The proposition, however, doesn’t cover education funding, which continues to be controlled by the state. “Before the state legislature makes any cuts, I think it’s important to determine priorities and make sure we find the revenues needed to cover them,” said Santa Monica Mayor Pam O’Connor. “Certainly we don’t want wasteful spending, but the governor shouldn’t force people in city governments to find ways to fill in the gaps.” O’Connor said she was particularly concerned about schools. “Local revenue is supposed to help fund education,” O’Connor said. “We contribute revenues to the state, and the next thing we hear, education funding is being cut.” In his Jan. 5 state-of-the-state address, Schwarzenegger reiterated his intention to cut costs statewide. O’Connor said the scenario was like a shell game where no one was really sure how locally generated tax revenues actually ended up being used by the state legislature. “The governor has backed out of his support for education,” she said. “The response I’m getting from our schools is that they’re not seeing revenues coming in. There’s a lot of uncertainty about what’s going on.” Santa Monica Finance Director Steve Stark said the passage of Prop. 1A would not impact the $2.7 million already earmarked for Sacramento for the 2005-2006 fiscal year, the same amount Santa Monica contributed to the state in 2004- 2005\. Coming from a variety of locally generated taxes, Santa Monica’s contribution is part of a statewide plan mandated by the legislature to help balance the state’s budget. Stark said that once Santa Monica had sent the next payment of $2.7 million to Sacramento that Prop. 1A should protect the city from future budget-balancing contributions. Gov. Schwarzenegger last year agreed to provide local governments long-term protection if they paid the $2.7 million for the next two fiscal years. After that, City Hall would receive a $1.6 million payback in vehicle license fees — and, with the passage of Prop. 1A, be protected from further state takeaways. Stark said that in the 2004-2005 fiscal year, Santa Monica had a total budget of $380 million. He added that it appears the city’s general fund, about 45 percent of the city’s total annual budget, would not be impacted by Schwarzenegger’s budget cuts. “All cities, including Santa Monica, were happy when Prop. 1A passed,” Stark said. “Local governments are in better shape because of it. But it’s also early — and the state finds ways to raise the money it needs.” Stark said he expected to see a reduction in state grant money that helped fund capital improvement projects in past years. “I expect we won’t be doing as much street resurfacing,” Stark said. Councilman Richard Bloom said Gov. Schwarzenegger, who pushed for the passage of Prop. 1A, had done positive things to protect local government revenue streams. “The state can’t borrow from our budget anymore because of Prop. 1A,” Bloom said. “But the bottom line is that we still have a $9 billion deficit in Sacramento. “And even though programs have been poured over many, many times to see where cuts can be made, it’s hard to imagine how we can cut services to the degree necessary to balance the budget,” he added. Bloom said there was considerable fear that the state will try to balance the budget on the back of education. “I’ve heard this fear repeated many times from various sources, so the concern is significant,” he said. Councilman Kevin McKeown said he was concerned by Gov. Schwarzenegger’s state-of-the-state address. “The governor’s refusal to augment revenues by fairly taxing corporations irresponsibly favors boardrooms over classrooms, including ours in Santa Monica,” said McKeown, who also is an official spokesman for the Green Party in California. McKeown said Schwarzenegger’s plan to cut services would leave local governments picking up the slack. He also was alarmed by Schwarzenegger’s announcement that he planned to reform the way teachers are compensated, basing their pay on merit rather than tenure. “Diverting money from education and calling teachers a ‘special interest’ is reprehensible,” McKeown said. “The real special interest is Santa Monica’s kids, and they are a very special interest indeed.” O’Connor said the entire education system needs to be reformed — not just the way that teachers were compensated for their work. “The manner in which we are funding our schools needs a complete overhaul,” she said. Councilman Robert Holbrook said Santa Monica and other municipalities aren’t immune from further money grabs from Sacramento. “We’re anticipating a huge war with the budget,” Holbrook said. *Originally published in the Santa Monica Daily Press print edition on February 1, 2005.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/020105.pdf?ref=smdp.com)