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City of Lafayette Staff Report

For:

Lafayette City Council

By:

Steven Falk, Lafayette City Manager

Invitation

to State Legislators to Discuss Their Votes and Positions on

the State Budget

Introduction

Mayor Tatzin has invited Assemblymember Nancy Skinner and Senator Mark DeSaulnier to

attend the Council meeting on August 10t1i to discuss and explain the following votes regarding

the State budget:

Summary of Votes and Positions by Lafayette's State Representatives

Redevelopment Funds from

California's Cities

(passed)

Borrow $1 .9B in Property

Yes

Taxes from California's

Cities (passed)

Take Away Gas Tax

Yes

Allocation from California's

Cities (did not pass)

Other Information

The Mayor and City Manager recently collaborated to publish an opinion piece (attached) in

the Contra Costa Times.

Recommendation

Discuss and direct staff.

Readers Forum: State budget molests California's already-suffering cities

By Don Tatzin and Steven Falk

Guest commentary

Contra Costa Times

Posted. 08/01/2009 12:00:00 AMPDT

Is it just us, or were you also disgusted to see California's legislators grinning and hugging

each other as they emerged from those marathon budget sessions last week? We are challenged

to find a single element of the recent state budget deal that warrants a smile or back slap.

Last week, the state Legislature passed a devastating take of

$2.05

billion from local

redevelopment agencies as part of a 30-bill package that purports to close most of the state's

current budget deficit. Because the state is too broke to meet its Prop. 98 obligations to schools,

the Legislature chose to hijack redevelopment funds from cities and use them to pay the state's

bills instead.

The Legislature also voted to "borrow" $1.9 billion from cities' property tax revenues. This is

legal under Prop. 1A, which allows the state to borrow the funds, but limits the borrowing to

twice every 10 years and further provides that the money must be repaid with interest within

three years. It is our experience, however, that when somebody borrows something, it is

typically done with mutual consent and under the presumption that the borrower will return the

item or pay back the amount borrowed. The only exceptions, of course, are teenage children

and, now, apparently, the state of California. We don't recall being asked by the state to borrow

our money, and we've yet to meet another mayor or city manager who believes the state will

make good on their debt within three years.

In total, the budget deal amounts to nothing less than an unwanted and aggressive molestation

of California's already-suffering cities.

We're particularly disgusted by the governor's smug claim that the state was able to balance

California's budget without raising taxes. This is appalling because what Schwarzenegger and

his legislative enablers did, in essence, was to balance its own budget by deeply wounding

local agencies, thus forcing the need for tax-raising down to cities and counties. This move is,

at best, disingenuous, at least crassly selfish and should even be considered seditious.

The take-away wouldn't be so bad if the state had, over the years, acted responsibly. The

Legislature could have, for instance, reserved money during good economic times to cover the

tax declines in bad years. That, as we know, didn't happen. Instead, cities and counties -

already suffering from the same downturn in tax revenues that plague the state - have now

been hit twice.

The theft is also notable for its brazenness. In 2004, 84 percent of California's voters passed

Proposition 1A, which sought to prohibit the Legislature from raiding local funds. Since 84

percent of Californian's can't typically agree on the color of an orange, that passage should

have sent a crystal clear message to the state that local governments should be left untouched.

Yet, not even five years later, State lawmakers are at it again, disregarding the clear direction of

voters while picking local pockets to bail themselves out from their own irresponsible actions.

Democrat and Republican lawmakers are equally guilty. It's no wonder that legislators are held

in such low esteem.

In the morning-after miasma, local officials now believe that cities, counties, school districts

and special districts must chart a radical path that makes them fiscally independent from state

government. There have been too many raids for too many years by the too-dysfunctional state

Legislature. Total and complete fiscal independence appears to be the only way to avoid future

molestations by an unfettered and irresponsible state government.

For, while most citizens have given up hope of changing Sacramento, most still trust their city

council and school board members to do the right thing. And most still believe that they can

have a positive impact on their local governments.

Don Tatzin is mayor and Steven Falk is city manager of Lafayette.