Hollister’s share of cuts to local governments from the state’s
compromise budget deal on Tuesday could top $1 million, according
to the League of California Cities.
”
They (the state) are taking over a million dollars from
Hollister citizens to balance the budget they screwed up,
”
said an adamant City Councilman Tony Bruscia.
Hollister’s share of cuts to local governments from the state’s compromise budget deal on Tuesday could top $1 million, according to the League of California Cities.
“They (the state) are taking over a million dollars from Hollister citizens to balance the budget they screwed up,” said an adamant City Councilman Tony Bruscia.
Gov. Gray Davis will reportedly sign the budget that was approved 29 days late. Local Assemblyman Simon Salinas, D-Salinas, was one of 52 members to vote yes. Twenty-two members voted no.
Hollister could lose as much as $623,000 in Redevelopment Agency funding and will lose more than $400,000 in Vehicle License Fee funding during the current fiscal year, officials said.
“That’s the latest figure I heard,” said City Manager Dale Shaddox. “Those (VLF and RDA) are the two biggies.”
The statewide figure for RDA cuts was not finalized. It was approved by the Senate on Sunday at $250 million. The Assembly, however, desired to cut $135 million, according to Deanna Sessums, the Monterey Bay representative for the LCC. Legislators will not estimate the final RDA cuts until sometime in August, she said.
Along with that, the state will borrow sales tax revenues from local governments and pay it back over the next five years. By Tuesday afternoon, city officials could not estimate a definitive loss in sales taxes, though, Shaddox said it may hover around $100,000.
“Well, it’s continued theft of local government funds,” Shaddox said. “Instead of the state learning to live within its means, like we cities do, they chose to steal from somebody else. I firmly believe that’s exactly what it is.”
The state budget has been fiercely debated for months among legislators. Davis’ revision in May included a projected deficit by next summer of $38 billion, which has since been pared down to about $8 billion through cuts, borrowing and raised fees.
Hollister officials adopted a $35 million budget of its own July 21. The city had included a projected loss of $500,000 from state VLF cuts.
Officials, however, did not project the RDA cuts to be so large.
“That’s a big chunk of money,” said Bruscia, who is also the League of California Cities Monterey Bay Division president.
Shaddox said the RDA hit cannot legally be paid from the RDA’s recently approved $35 million bond measure. The bond was passed to pay for several future infrastructure projects, including the new wastewater plant and safety improvements to Highway 25.
The projected $613,000 will come from the RDA’s operating fund, which finances affordable housing projects and economic programs, Shaddox said.
“If we can’t do either one (affordable housing and economic development), what good is (the RDA),” he said. “It’s especially critical for Hollister, in spite of the cease-and-desist order.”
The VLF funding and sales tax losses will come from the city’s General Fund reserve and may increase a previously projected $730,000 deficit, Shaddox said. The Hollister General Fund reserve has dipped from a record high of more than $15 million in 1999 to $9.3 million.
If the state cuts further increase the city’s deficit for 2003-2004, Shaddox said he will advise the Council to revise Hollister’s recently approved budget.
“We cannot afford to dip more into the General Fund than what the Council approved last week,” Shaddox said.
