Published on REPORTERS' NOTEBOOK (http://notebook.mercedsunstar.com)

State may look to local cities to settle deficit

By scottjason
Created 2008-07-17 09:04

Sacramento lawmakers are looking at grabbing cash from local coffers to settle their problems, The Sacramento Bee's Capitol Alert reported Wednesday.

"The first would transfer property taxes away from local governments to area schools. That would lower the amount of school spending that musts come out of the state's general fund, helping balance the state's books.

Voters limited that practice in 2004, approving Proposition 1A with 80 percent of the vote. But that measure allows lawmakers to still make such a transfer -- up to two times per decade -- provided the state pays back all the borrowed funds within three years.

Ironically, this is the first year lawmakers are eligible to make the property tax transfer since Proposition 1A passed."

The state's cities, already coping with lower revenue from a sagging sales tax and a plunge construction revenue, would be hit hard if the proposal gains traction.

In Livingston, leaders expect to collect $1 million in property taxes, almost a quarter of the total general fund, the city's fun-money that pays for police, fire and other essential services.

In Atwater, the city has about $5.2 million in property taxes budgeted, which is more than a third of the city's general fund.

Clearly, if any of that money is directed to local schools, the cities may have to overhaul their budgets and look harder at what can be cut.


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