California budget: Local reaction to state money grab

TRUCKEE, Calif. — Local governments are letting out a qualified sigh of relief as the state budget — and what it will take from local jurisdictions — becomes clearer.

It appears that one of the biggest worries for Truckee, Nevada County and Placer County — the potential for the state to take away the Highway Use Tax Act, or the gas tax — has been taken off the table, thereby preserving needed local road maintenance and snow removal funds

Still, each municipality is looking at a hefty chunk to be borrowed by the state in property taxes, and are waiting for the other shoe to drop when the legislature comes back in August.

“We are relieved at this point but also concerned; when are they going to come back for more?” said Truckee Town Manager Tony Lashbrook.

He said the town still stands to lose $1.5 million over the next two years to the state, potentially putting a big dent in redevelopment projects like downtown street-scape work planned in the next five years.

Placer County Executive Officer Tom Miller said the current best estimate is a reduction of about $17 million to his county with the state budget as proposed.

That includes between $8 million and $11 million from Prop 1A that will affect the general fund, libraries and fire, Miller said.

“The biggest area to be hit will be health and human services at $5.3 million,” Miller said. “But we are trying to sustain services county-wide.”

Nevada County Deputy County Executive Joe Christoffel said the largest piece of funding the state could borrow would be $2.7 million in Prop 1A, but the county is still analyzing all the implications of the budget.

“I don't think anybody is overly happy,” said Nevada County Supervisor Ted Owens.

But retaining the gas tax — for now — is a good thing for the eastern portion of the county.

“I think the town is to be commended for working with the lobbyists on this issue — we dodged a serious bullet,” Owens said.

The taking of gas tax revenue could have cost Truckee, Placer County, and Nevada County roughly half of each of their respective road maintenance budgets.

State parks in the aftermath

What exactly will become of California State Parks is not yet clear in the wake of California's recently revised budget.

Ruth Coleman, director of California State Parks, said they will lose roughly $16 million from legislative reduction and the governor's line-item vetoes.

Add onto that a loss of about $12 million in services from the furloughs and a loss of revenue of about $10 million, and Coleman estimated a total loss of $39 million — or about 21 percent of state park's operating budget.

This means about 100 parks will close, as opposed to the 220 of 279 first proposed to shut down by Gov. Arnold Schwarzenegger.

Exactly which ones will be shut after Labor Day isn't known, and won't likely be known for weeks.

“We're not going to put out a list yet — we want to work with public-private partnerships to see if anybody will help fund some parks to see if we can keep more open,” said Roy Stearns with state parks.

Coleman said state parks will explore seasonal and partial closures as alternatives to full closures.

From the legislature floor

State Assemblyman Ted Gaines, the Republican who represents Alpine, Placer, El Dorado and Sacramento counties, said he wasn't pleased with the budget's reliance on property taxes borrowed from cities, towns and municipalities.

“It's my concern the state will continue to be in deficit mode for the next couple of years,” Gaines said. “You have to ask yourself if you can pay the obligation back to these city governments, and the next question is do you think the state can pay it back in the three-year time frame?”

After dinner last week Thursday, Gaines and other legislators were locked down for 20 hours until an agreement was reached mid-afternoon Friday.

“It's not the best environment for making sound decisions,” Gaines said. “By design they try to wear you down so you capitulate.”

Gaines voted against the budget out of his concern for local governments, and said the state will probably be in a similar situation next July.

“I think it's going to continue to be a challenge to balance our budget for the next several fiscal years,” Gaines said. “If you look at our pension plan we have $48 billion in commitments we haven't put one penny toward.”

TTUSD waits, watches

Tentatively, good news appears to have come from Sacramento as far as the Tahoe Truckee Unified School District is concerned.

The bad news is mostly certain — the district will need to give back about $2.6 million in a “fair share” agreement, said Steve Dickinson, assistant superintendent of finance for the district.

The “fair share” agreement is a reduction in the state funding afforded to Basic Aid school districts — like TTUSD, which account for about 10 percent of California districts and receive a majority of their funding from local property taxes. The reduction equals funding cuts to Revenue Limit districts — which account for the majority of California districts and rely heavily on state funding.

What isn't certain and what may be good news is how much beyond the $2.6 million the state will take. A cut to transportation went through as only a 20 percent reduction, as opposed to earlier, higher estimates. It equates to a roughly $300,000 cut for the district. What isn't clear, Dickinson said, is if the cut comes atop the “fair share” reduction or is included in the cut, meaning the deficit for the upcoming year could still range between $2.6 million and about $3 million.