League of cities working to stop state from taking local government funds

The state of California has a $20 billion problem. But if the League of California Cities has its way, the state will have to look elsewhere when it comes to rummage through local governments' pockets and sofa cushions looking for loose change.

The league, an organization of city officials, is sponsoring the Local Taxpayer, Public Safety and Transportation Protection Act of 2010. Proponents of the statewide measure say that, if passed in November, the initiative would stop the state from shifting, borrowing or outright taking money from cities to cover its own budget shortfalls.

It's been a give-and-take relationship with the state and local governments for years, city officials say: The state takes and the cities give.

Just this past year, the state borrowed close to $5 billion from local cities, says the website for Californians to Protect Local Taxpayers and Vital Services, an offshoot of the league. That money is taken from property and gas tax revenue and redevelopment funds, it reports.

All of those funds are essential in keeping a city's infrastructure intact and running properly, said Saratoga City Councilman Chuck Page, a league committee member. That could be everything from repaving roads to public safety, he said.

Page said that the state has taken $9 million from Saratoga over the past decade to help with its budget deficits. Just this year the state pulled $674,777 from Saratoga after the state legislature

voted to suspend Proposition 1A, a proposition passed in 2004 to protect local governments' revenues from being transferred away by the state.

The state has found loopholes, Page said, which this new measure will close.

"The state has to stop coming to the cities and taking our tax revenue, our gas tax money. If they take it away, then we can't take care of our infrastructure," he said.

Page added, "You can only borrow so much for so long. Eventually you have to fix your problem. And what we're doing is telling the state to fix its problem."

"We believe this could be the first step toward state reform," said Rebecca Elliot, regional public affairs manager for the Peninsula division of the league. She added that the measure could be the key that finally locks the "revolving door of finance."

This should be the "once-and-for-all" answer to the issue of state takeaways, said Campbell City Councilman Dan Furtado, who represents his city in the League of California Cities. Proposition 1A was expected to protect the cities, but a portion of the measure allowed states to take money in emergency situations.

"Everything now has become an emergency, which allows them to circumvent that," Furtado said, adding that the state has raided Campbell's general and redevelopment funds for a combined total of $21.4 million since 1993.

All of this comes at a time when cities are trying to meet the needs of their citizens will less money, Furtado said.

"We're already hurting from sales tax being flat ... and more recently property values have declined, which means less property tax," he said.

The league is well on its way to receiving a million signatures by mid-April to put the measure on the November ballot, Elliot said. And it isn't just elected officials pushing the proposition along, she added. Citizens have joined up and are also getting friends involved in the effort.

Los Gatos Town Councilman Joe Pirzynski is one local official who has been covering the area looking for residents to sign the petition. When people learn about what the measure is intended to do, he said, they are eager to sign the petition.

"It sells itself," said Pirzynski, a board member on the Peninsula division of the league.

Pirzynski said that Los Gatos has 250 signatures, the most of any city in Santa Clara County.

"Right now, this is extremely important," he said. "This may be the most important thing any of the cities in the league are involved with."

The measure, if passed, would keep local governments from being "enablers" and stop "the inappropriate behavior by the state," he said.

In addition to concerns about state takeaways, Santa Clara County is now eyeing some city funds.

Page said that the county is expected to take Saratoga's portion of the Community Development Block Grant. Those funds go to help support local programs like the Saratoga Senior Center and West Valley Community Services, which provides a food pantry and emergency housing for 611 people a year, 67 of them from Saratoga.

The Saratoga councilman added that if the county pulls the money from Saratoga, those funds will most likely be diverted to other things, such as homeless and parolee services.

Page said he has no problem with helping those groups, but wondered how it will affect local services.

"If they do that, then what happens to the food banks? What happens to our senior center and adult day care that we give money to each year? All of a sudden, if that dries up," he said, "we'll lose the ability to do these programs."