Uncertainty continues in city, school district and county
offices across the state as legislators and Gov. Gray Davis in
Sacramento are still unable to agree on the 2003-04 budget, now
three weeks overdue. At Wednesday
’s City Council meeting, City Manager Ed Tewes brought the
Council and the public up to date on the situation.
Uncertainty continues in city, school district and county offices across the state as legislators and Gov. Gray Davis in Sacramento are still unable to agree on the 2003-04 budget, now three weeks overdue.
At Wednesday’s City Council meeting, City Manager Ed Tewes brought the Council and the public up to date on the situation.
“The fate of city services are still up in the air,” he said. “There is no state budget and now they are talking about ways to borrow funds to avoid balancing the budget this year. We are still uncertain as to the impacts of the state budget upon us.”
The Legislature has been wrestling with a shortfall balloon that will reach $38.2 billion by next July if not punctured with spending cuts, increased taxes or borrowing. Democrats are reluctant to make more spending cuts and Republicans are reluctant to raise any taxes. In fact, Republican Leader Jim Brulte, R-Rancho Cucamonga, has threatened retribution to Republicans who vote for tax increases.
Having had no luck getting the required two-thirds support for cuts or increases, the Legislature is now considering a compromise that would hold off a decision on these painful items until next July by borrowing money and covering the finance costs with a kind of tax swap. New money to cover the deficit would not then be needed until July 2004.
Under the swap idea, one-half cent of the sales tax that currently ends up in city and county treasuries would be used to pay off the deficit bonds. To make up the difference, cities and counties would get property tax funds that normally goes to the schools. And the school treasury would be filled from the state general fund.
Complicating the matter that has almost completely occupied the Legislature was the announcement Wednesday that a recall election likely would take place Oct. 7. Early estimates of the cost to counties – already strapped by the faltering economy and from reduced support from state and federal governments – would be about $35 million.
