California budget: Cities, counties brace for potential hits |

California budget: Cities, counties brace for potential hits

GRASS VALLEY, Calif. and#8212; Already reeling from declines in property and sales taxes, local government officials were bracing for further raids on their coffers after state legislators and the governor produced a budget compromise to close the estimated $26.3 billion shortfall.

Part of that budget proposal would have the state and#8220;borrowand#8221; $2 billion from local governmentsand#8217; property tax revenues, money they say would be repaid with interest in three years.

That state budget proposal is expected to go to the Legislature for a vote on Thursday.

Local officials had little information Tuesday regarding the details of that compromise, reached a day earlier by Gov. Arnold Schwarzenegger and four legislative leaders. It would require a two-thirds majority vote by both the Assembly and Senate.

and#8220;Who knows if it will get through the Legislature?and#8221; said Joe Christoffel, Nevada Countyand#8217;s Deputy County Executive Officer in charge of finance.

and#8220;Some people are saying the Big Five (governor, Senate and Assembly leaders) have an embargo on the details,and#8221; Christoffel added. and#8220;Itand#8217;s still unclear what they will take from (redevelopment funds) and the gas tax.and#8221;

and#8220;Weand#8217;re still looking at it,and#8221; said Grass Valley Assistant Finance Director Debby Sutton. and#8220;Weand#8217;re hoping to get a better idea when they sign the budget,and#8221; hopefully by the end of the week.

Grass Valley budgeted $400,000 for property tax shortfalls when adopting its current budget, which closed its own $1.5 million gap. City officials now fear the state will take more money from redevelopment and gasoline tax revenues.

and#8220;Until the governor signs something, we wonand#8217;t know what to expect,and#8221; said Nevada Cityand#8217;s City Manager Gene Albaugh. The city has anticipated a $120,000 grab by the state.

In Nevada County, officials expect the state to take up to $11.4 million from property taxes, gasoline taxes and election reimbursements and by eliminating drug and alcohol funding.

The budget proposal also includes another $2 billion in cuts in redevelopment money and transportation funding, the Associated Press reported.If so, projects such as the Dorsey Drive Interchange may be in jeopardy.

The compromise package also calls for $878 million in cuts to social services.

State park closures still are possible, but the projected cut is only $8 million, California Parks and Recreation Department spokesman Roy Stearns said.

Those cuts do not appear as drastic as they did earlier in the year, when the countyand#8217;s four state parks were targeted among 220 across the state. They include Empire Mine State Historic Park in Grass Valley, Donner Memorial State Park in Truckee, South Yuba River State Park west of Nevada City and Malakoff Diggins State Historic Park near North San Juan.

and#8220;We wonand#8217;t know how many or whereand#8221; to expect the cuts for several days, Stearns said. and#8220;It will take time to apply it across California.and#8221;

With the stateand#8217;s economy expected to continue suffering from the imploded housing market and reverberations from the budget crisis,officials wonder how the state will be able to repay the money in three years..

and#8220;How will they pay it back in three years?and#8221; Albaugh asked. and#8220;Usually if you borrow money, you have to put collateral. Whatand#8217;s the stateand#8217;s collateral?and#8221;

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