If you saw last Tuesday night's Claremont City Council meeting, you heard City Manager report on the current state of the City's budget. There was good news and bad news.
You'll recall that the City scrambled to balance the budget for the fiscal year ending June 30th. The cost savings were met by a combination of across-the-board departmental cuts, reductions in employee compensation, a hiring freeze, and some one-time accounting maneuvers.
So, the good news is the city budget is balanced for the next six weeks, through June 30.
The bad news is that Claremont's projected $2 million budget deficit for FY 2009-10 may grow significantly if the state pulls local funds to fix its own budgetary problems.
You've no doubt read that because of the recession, California's tax receipts have declined significantly, so that the state is facing a projected $15.4 billion deficit in the upcoming fiscal year. And that's without the key ballot measures (1C, 1D, and 1E) passing in this week's special election. If the measures fail, the deficit is projected to grow to over $21 billion.
City Manager Parker also described the budget situation in this in his weekly Friday report posted on the City's website:
STATE BUDGET
On May 14 Governor Schwarzenegger released his May budget revise for the 2009-10 fiscal year. The state is now projecting a $15.4 billion dollar shortfall, assuming the Propositions on the May 19 ballot pass and a $21.3 billion dollar shortfall if they do not. While the majority of cuts to balance this shortfall will affect state agencies and state employees, there are some impacts to local government.
The county is likely to have mental health and other medical related responsibilities increased as the state shifts the responsibility. There also may be reassignment of prisoners from state prisons to county jails.
The largest impact to the City of Claremont listed in the May revise at this time, is a $640,000 loss to the general fund due to the state plan of borrowing $2 billion dollars from local government under the provisions of Prop 1A. Prop 1A allows for the state to borrow 8% of local agencies property tax. It also requires the state to pay back local agencies within three years.
Staff is continually monitoring the state budget situation and will provide updates and more information as it becomes available.
Governor Schwarzenegger unveiled two possible budget plans, one to be used if the ballot measures don't pass, and a more Draconian one to be employed if the measures fail. Besides borrowing $2 billion from local government funds, the later includes: laying off 5,000 state employees, selling off state-owned assets like the Los Angeles Memorial Coliseum (sorry Trojan fans), cutting healthcare spending, reducing the school year by seven days, cutting education spending by $5 billion, trimming the school year by a week, and borrowing $6 billion. Oh, and then there's that release of 38,000 prisoners from state correctional facilities.
That last one smacks a bit of blackmail: Vote for my propositions or I'll loose the howling hellhounds! The Governor isn't really going to release them. He's talking about moving 19,000 illegal immigrant prisoners to federal prisons and transferring another 19,000 low-level inmates from state facilities to county jails.
It doesn't sound as if voters are buying this. Polls show the props losing, and the Los Angeles Times had an analysis yesterday that indicated the electorate is all for forcing Sacramento to take responsibility for the mess. The article, by Michael Rothfeld, said:
Many voters don't understand the propositions' crazy quilt of provisions, drafted to please different politicians and constituencies, and some see them as another empty promise. David Wells, 64, a retired procurement officer from Hawthorne, said the measures seem like elected officials' way of pawning off their responsibilities onto the people they represent.
"What's the governor's function if it isn't to control normal, everyday spending of the state?" Wells asked.
In any case, even under Schwarzenegger's best scenario, there will be a lot of cutting to be done. Maybe at long last we've finally reached the end of rationalization in Sacramento. Governmental budgets at all levels are the last remaining speculative bubbles, and economic realities are bursting those. We wondered for years when voters were going to demand that the politicians they've elected give up their respective ideological ground and face the fiscal facts.
Democrats, that means less spending and more truth about the real costs of services; Republicans, that means higher taxes and an admission that most people like a certain level of government service beyond mere public safety. Both parties need to stop worrying about the proverbial next election and act as public servants.
Lastly, voters of all ilks, stop being stupid about things and take time to actually educate yourselves about real the real costs and benefits of government and then get off your butts and vote. We really have no one to blame but ourselves for the gridlock.
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