August 19, 2004

San Jose faces many budget challenges

By Vice Mayor Pat Dando
Special to the Times

If you have been following the news, reading my newsletter, or heard me speak at recent community events, you are probably familiar with the budget challenges that face San Jose. In June, the San Jose City Council approved the 2004-05 Operating Budget. It was the most challenging and difficult budget in our city’s history. Record deficits were not just the result of our local economic situation, but the state’s taking of city funds to balance their own budget only made matters worse.

For far too long, state legislators have treated local government funds like their own personal piggy banks. They break into them to get millions of dollars whenever they overspend their budget. We have to put a stop to this.

The facts are staggering. Since 1991, more than $30 billion of local property tax revenues have been taken by the state from cities and counties to help balance the state’s books. During that time, San Jose has lost over $221 million to Sacramento. And, this year, our city will lose out on roughly $11.1 million of tax revenue. This is money that could be used to pave our roads, keep community centers open, expand library hours, and hire new police officers and firefighters. Instead it goes to Sacramento and we have no idea how it is spent.

Watching spending in Sacramento spiral out of control, California’s mayors and city councilmembers banded together to send a strong message to the capitol: NO MORE! As a board member for the League of California Cities (LCC), which represents cities across the state, I have been working for the past year to develop a plan that protects local governments from these raids by the state legislature.

Together with Gov. Schwarzenegger, the LCC developed a constitutional amendment to protect local government’s coffers. This measure will provide strong protection of local revenues in the future, while also providing the state with flexibility in the event of a severe, fiscal emergency. It will appear on the November ballot as Proposition 1A.
Under this plan, cities and counties will know each year how much money they will receive from Sacramento.

Additionally, the state will no longer be able to take local tax dollars on a whim; they’ll have to ask. Even better, the state must repay what they borrow and can only get a loan from cities twice every 10 years provided they pay the first loan back. Finally, state legislators would no longer be able to pass the buck to cities, counties, and special districts to pay for programs they can’t afford but require local government to provide. Proposition 1A is good for the state, good for local government and good for all Californians. It is just what is needed to protect the vital local services that every resident expects their city to provide: police and fire protection, emergency medical services, parks, and libraries.

We need to get behind the governor’s proposal to bring stability and balance to the budgets of local governments. This plan protects our police, fire, park, and library services without raising taxes or taking money from education, senior citizens, and other groups. We also need to tell our state legislators that they must live within their means.

Proposition 1A will stop the state from stealing local money and using it for its ever growing bureaucracy. I hope you will join me in recognizing that it’s time for cities and counties to stop being piggy banks for our legislators to break each time they need to sate their appetite for spending money.

Thanks to the governor’s strong leadership we now have what is needed to keep your hard earned tax dollars in your community.