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City leaders fear state money grabs

By Kurtis Alexander, Berkeley Daily Planet
Friday May 03, 2002

State may “balance its budget on the backs of cities,” mayor says 


With the recent news of a projected $2.8 million shortfall at city hall, fears are mounting that money problems will grow further as a result of cutbacks in Sacramento. 

“The state is quite likely to balance its budget on the backs of cities,” said Mayor Shirley Dean. “This is what they’ve done before.” 

Next week, lawmakers in Sacramento are scheduled to release their May revision of next year’s budget proposal, which will begin to outline how state shortfalls will be dealt with. 

The task assures hardship. Berkeley’s state lobbyist Lynn Suiter and Associates informed the city this week that the state’s projected budget shortfall for next year is likely to eclipse February estimates and could exceed $20 billion, the largest of any U.S. state. 

“I think everybody at the local level should be nervous,” said District 14 Assemblymember Dion Aroner. “We’re the major funder of local governments.” 

City Budget Manager Paul Navazio said he’s most nervous about the plight of vehicle registration fees. While the DMV funds have traditionally been shared between the state and cities, Navazio worries that California lawmakers will choose a greater portion for themselves this year. 

The registration fees were worth about $6 billion to the city this last fiscal year, according to city officials. 

Another possible state grab, which has long concerned local jurisdictions, is property taxes through the Education Revenue Augmentation Fund, Navazio said. It’s possible that state lawmakers will boost their share of local property taxes, which were historically controlled by cities, he said. 

ERAF legislation permits the state to do this with the understanding that they will redistribute property tax revenues among school districts. 

Navazio also foresees cutbacks in a number of state programs which will affect a range of local items, including transportation, childcare and health care. 

Assemblymember Aroner added mental health services, social services, and schools to the list of where state funding cuts are likely to affect the city of Berkeley. 

She said state lawmakers were trying to keep the cuts “as far away from the classroom and from the emergency room as possible,” noting her desire to least impact the most vulnerable populations. 

“But you can’t lose one fifth of your budget and not make cuts,” she said disappointedly. 

In addition to the possibility of losing millions of state dollars, city leaders are troubled by the fact that they must create a budget for next year without knowing what their actual revenues from the state will be. 

“We have to develop contingency plans,” said Assistant City Manager Phil Kamlarz. 

While the city budget is due on June 25, it is not likely that the state budget will be known until months later, Navazio said.