Now that California voters have overwhelmingly passed
Proposition 1A, which essentially shuts down the state’s ability to
take money from local governments, Hollister and San Benito County
officials are saying programs that have been cut or under-funded
for years may start to make a comeback as the budget bounces
back.
Hollister – Now that California voters have overwhelmingly passed Proposition 1A, which essentially shuts down the state’s ability to take money from local governments, Hollister and San Benito County officials are saying programs that have been cut or under-funded for years may start to make a comeback as the budget bounces back.
After last year’s budget crunch, which caused the city to eliminate 21 jobs according to City Manager Clint Quilter, the city should benefit greatly from 1A’s passing. Over the next two years, Hollister will give the state government about $600,000, Quilter said. The year after next, the state would give back about $680,000.
The flow of money the state has been sucking out of local tax revenues – at least $2.5 million from Hollister and $20.5 million from San Benito County over the past 12 years – will also stop under Proposition 1A, according to Deanna Sessums of the League of California Cities. The city’s Redevelopment Agency also lost significant amounts of property taxes in the past two years – about $200,000 in 2002-03, and $350,000 in 2003-04, Sessums said.
“The important thing for us (Hollister) is, the state for a number of years has been taking money from our taxes, and now they can’t do that any more,” said Quilter.
In order for the state to borrow any money from Hollister after the next two years, Quilter said, the governor would have to declare a fiscal emergency. He could then borrow local funds only if the state had already paid the city back the $680,000 it has been promised. Any funds borrowed after that would have to be repaid within three years.
It is impossible to say how much money San Benito County cities will save by not having to send money to the capitol, Sessums said. What it will do is get rid of some question marks that make it more difficult for local governments to put together a budget.
“We can’t say how much money we’ll save over the next few years because we don’t know how much the state would have taken from us in the future. What 1A does is get rid of that unknown, so cities can put together their budgets without saying ‘I wonder how much we have to account for the state taking this year,'” Sessums said.
City Councilwoman Pauline Valdivia said she is glad 1A passed, and hopes the new law will allow the city to reinstate or flesh-out programs that have suffered as a result of the budget crisis. She specifically noted public safety programs and the police department as areas in need of help.
“We used to have police officers going out to the schools talking about preventative things – crime, drinking, smoking. That’s something I’d like to see come back,” Valdivia said.
When the City Council sits down to look at the budget over the next few years, she hopes this will be a program they bring back, although she said it is tough to say for sure right now.
“When we do the budget, we look at the whole pie, not just a quarter of it,” she said. “There’s only so much that you can streamline, but hopefully with the funds that the state won’t be stealing any more, we won’t have to streamline as much.”
Another component of Proposition 1A says the state can no longer mandate local governments to provide programs the state doesn’t fund. Theoretically, Hollister and San Benito County could therefore cut state-mandated programs officials thought were unnecessary in order to save money.
San Juan Bautista City Manager Larry Cain said this would affect district and county programs more than city programs. But it would be difficult to project exactly which programs may be cut or reinstated as of now, said County Supervisor Pat Loe.
“Actually, this (1A) won’t go into effect for another year. But what it will do is allow us to see how much money we’ll be saving each year and balance the budget a whole lot earlier,” she said. She added the Board of Supervisors would probably have a better idea of what various programs will look like in August or September of next year.
Local governments cannot finalize their budgets until the state finalizes its own, since the state is notorious for taking money from its cities and counties. Last year, California missed its ninth budget deadline in 11 years, according to the Associated Press.
Hollister City Manager Quilter said the cutting of state-mandated programs probably wouldn’t be an issue in Hollister.
“That portion of it is not a huge deal for us,” he said, adding the city probably won’t be looking into reinstating the 21 jobs cut during the budget crunch.
“What it will do though is ease any cuts we have to make as we move forward,” he said.
Proposition 1A was put on Tuesday’s ballot as a result of negotiations between the League of California Cities and Gov. Schwarzenegger. It passed with 85 percent of the vote in California, and by about the same margin in San Benito County.
Officials from cities and counties throughout the state had originally pushed for another proposition, 65, which asked the state to stop taking local governments’ money right away.
“I pretty much describe 65 as ‘Our way or the highway’,” Sessums said. Gov. Schwarzenegger, though, needed financial help for the state for the next two years, so 1A was struck as a compromise.
“It basically says we’ll (local governments) help him with the financial crisis for the next two years in exchange for long-term financial stability,” she said.
Jessica Quandt is a staff writer for the Free Lance. Reach her at 831-637-5566 ext. 330 or at [email protected].
