LB City Manager responds to potential budget cuts

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long-beach-stimulus-moneyLong Beach has learned that proposals being discussed at the State Level could impact the City of Long Beach up to $44 million in Fiscal Year 2010.  No State budget has been approved and the negotiations are ongoing early Wednesday evening, raids on local government funds continued to be discussed at the State level.  These potential ideas to balance the State budget on the backs of local government include:

$8 million in Gas Tax
An illegal raid of up to $8 million in Gas Tax funds, which are used for local street projects and to fund critical transportation operations such as Street Light Power, Engineering/Project Development, Street Tree Maintenance, Street Markings/Signs, Potholes Crews, and Traffic Signals Operations and Maintenance.  These funds would not be paid back, under the State’s current proposal.

$10 million in Prop 1A Borrowing of Local Government Property Tax
The State would borrow eight percent of General Fund property tax revenues received by cities, counties and special districts.

$6 million in RDA Funds
An illegal raid of $6 million or potentially more from the Redevelopment Agency, which would not have to be paid back.

$20 million in Low-Moderate Income Housing Set-aside dollars
One proposal is to raid the entire amount of housing “set-aside” Long Beach would receive next year. These funds are used to increase, improve, and preserve the supply of housing for low- and moderate-income households and provide loans to those in danger of foreclosure. These dollars also leverage significant additional investment in workforce housing – a recent project funded with housing set-aside dollars leveraged other funds by a factor of 10.

“While cities across the state have made tough cuts for years, Sacramento has lacked the fiscal discipline to put their own house in order,” said Mayor Bob Foster. “These proposals mean another $44 million in cuts to Long Beach and they fall squarely at the doorstep of the State Capitol and years of smoke and mirrors budgeting.”

The League of California Cities and the Community Redevelopment Association have threatened immediate lawsuits to strike down the Gas Tax raid and Redevelopment raids, should the State enact these proposals.

The City of Long Beach will be dealing with how to respond to these cuts, if implemented, during budget deliberations.

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