Town’s contribution to California: $600K |

Town’s contribution to California: $600K

The bad news is that the Town of Truckee, like local governments throughout the state, will likely have to contribute more than a half-million dollars over the next two years to help balance California’s budget.

The good news is that the mandated financial aid to Sacramento won’t be permanent, as was put forth in Gov. Arnold Schwarzenegger’s budget proposal in January. That plan called on cities, counties and special districts to pony up $1.3 billion to the state annually through a permanent shift of local property taxes.

But the League of California Cities and the California State Association of Counties condemned the governor’s proposal, saying it would rob money from services local government provides.

Instead, the governor’s office and the lobbying groups reached a compromise, which features a two-year-only takeaway of $1.3 billion each year from local funds. As Truckee’s representative to the League of Cities, Mayor Josh Susman voted last week in Sacramento to support the organization’s revenue protection package.

If the local government contributions are accepted by the Legislature as part of the governor’s revised budget proposal, Truckee’s share will translate into approximately $600,000 for the two years, said Stephen Wright, Truckee town manager.

“We’ll incur a hit of $295,000 this coming year and the following year,” Wright said, adding that in the third year of the compromise package, the town will receive $265,000 from the state for the “hit” it took this year. “The prize is really protecting government revenues from this point forward.”

The cuts in the compromise package will be painful for cities and other local agencies, said Pat Eklund, mayor of the City of Novato, at the League’s meeting last week.

“But the long-term stability and predictability in our revenues will make a huge difference to our communities,” he said. “For the first time in more than a decade cities and counties will be able to fund essential local services without worrying that the state will pick our pockets.”

As part of the compromise, Schwarzenegger said he will work with local government officials to support a constitutional amendment for the November election that would prevent future state takeaways of local revenues needed to fund police, fire, health and other local services. Meanwhile, cities and counties still have the option of their own November ballot measure that calls for voter approval before the state can raid local coffers.

It is that type of behavior that spurred the Truckee Town Council 18 months ago to start what Wright called the State Budget Contingency Reserve Fund. The town was able to put aside about $800,000 from its general fund to pay the state if it came calling.

Council members “saw something like this coming,” Wright said, adding that of the $800,000, there remains a $560,000 balance. The town is set to add another $36,000 to meet the two-year contribution to the state, he said.

“All $600,000 will be covered,” Wright said. “The council had the foresight to put away that money for a rain day.”

Proposed contributions to state from Nevada County’s cities and towns each year for the next two years.

Truckee – $295,315

Grass Valley – $214,509

Nevada City – $70,908

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