Day 79: League of California Cities Statement: FINAL BUDGET UNDERSCORES DRASTIC NEED FOR REFORM

Last update: 5:46 p.m. EDT Sept. 17, 2008

SACRAMENTO, CA, Sep 17, 2008 (MARKET WIRE via COMTEX) -- The League of California Cities has urged state leaders for months to find common ground on a state budget and produce one that is responsible and does not raid voter-protected local government, redevelopment or transportation funds. We urged them to level with the taxpayers about what it would take to get the job done, including budget cuts and tax increases. The Legislature's adoption of a budget early Tuesday morning, that some legislative leaders described at worst as a "Ponzi scheme" and at best as a "short-term solution," gives Californians little comfort that this goal has been met.

Gov. Arnold Schwarzenegger's announcement yesterday that he intends to veto the budget because of its many shortcomings underscores just how broken the state budget process really is. Californians have every right to expect better than a budget that passes the buck to next year's state leaders. Unfortunately, that is what this budget gives them, and its shortcomings will become even more evident in the days and weeks to come.

Early this spring, the League committed to supporting a budget that did a few simple things:

-- Achieves savings by eliminating overlapping, obsolete and redundant programs;

-- Balances state spending and state revenues without "borrowing" voter protected funds;

-- Cuts spending responsibly and raises new revenues only to address the structural deficit and avoid devastating budget cuts (not for new programs), but only if there is substantial budget reform;

-- Enacts meaningful budget reforms to help the state weather the next economic crisis; and

-- Continues to invest in infrastructure to aid the economic recovery.

The League's leadership applauds the Governor and Legislature for agreeing that the budget should not rely on "borrowing" local government and transportation funds. We are also pleased that the adopted budget provides additional Proposition 1B funding for local streets.

However, we strongly oppose the fact that part of the Legislature's final budget effectively steals $350 million of local redevelopment funds that are so essential to the vital community infrastructure investments that generate both high paying construction jobs and substantial state and local revenue. There also seems to be little in this budget in terms of streamlining or real solutions that address the state's structural budget deficit. In fact, some of the solutions are expected to make next year's problems worse.

In short, after 78 long days of gridlock, it is clear that most legislators, the Governor and other opinion leaders agree that the adopted budget will not serve California well in either the short- or long-term. More importantly, this consensus emphasizes the critical need for comprehensive budget reform.

The League stands ready to work with state leaders and other stakeholders in moving this agenda forward. California can ill-afford another budget impasse that threatens funding for critical services and undermines public confidence in government. The time has come to fix this dysfunctional system and do the job Californians rightfully expect from their state and local officials. Now is the time and this is the place.

Contact:
Eva Spiegel
(916) 658-8228
Cell (530) 400-9068

1400 K Street, Suite 400
Sacramento, California 95814
Phone: (916) 658-8200
Fax: (916) 658-8240
 www.cacities.org