LV city budget feels governor’s pressure

by Julie Kim
Staff Writer

California Gov. Arnold Schwarzenegger’s proposal to redirect $1.3 billion from local property tax revenues to the state could cost the city of La Verne $300,000, city finance officer Ron Clark said this week.

The city claims it is already losing $1.3 million from siphoning by the state legislature, most prominently from last year’s budget shortfall and the always controversial Proposition 13.

The measure, passed in 1978, allows the state to determine how much of city property taxes can be re-allocated.

Schwarzenegger’s first proposal, sent to the legislature on Feb. 9, seeks to pull $1.3 billion from local governments to pay for the state’s $40 to $50 million education budget.

California spends the majority of its money, derived mostly from income and sales taxes, on schools, Clark said.

“Basically, the governor is proposing to take more taxes from local government and shift it over to schools so the legislature doesn’t have to use their money,” Clark said.

“We need it more than they do,” he said.

According to La Verne City Manager Martin Lomeli, there is $500,000 in the general fund reserves to cushion the impact, should the legislature pass the proposed budget.

Most cities have financial reserves or a savings account, said La Verne Assistant City Manager Bob Russi.

But Schwarzenegger’s plan could have longstanding effects.

“La Verne has one year to absorb the impact,” Lomeli said. “If it continues to be longer, we will have to reduce in areas such as parks.”

La Verne spends about 70 percent of its income on the police and fire departments, Clark said.

He added that the governor’s proposal is another example of the longstanding conflict between California’s state and city governments.

The League of California Cities, comprised of the state’s 478 cities and 58 counties, is sponsoring an initiative for the November ballot in an effort to prevent the legislature from having too much control over property tax revenues, Lomeli said.

Clark said the initiative would let state residents vote on whether the legislature can continue to take funds from property taxes.
“I don’t know if [Schwarzenegger’s] proposal will pass, but La Verne and other city officials are hoping that it doesn’t,” Clark said.