Budget shortfall may fall to cities

CULVER CITY - Downey Mayor Mario Guerra traveled to Culver City recently where Gov. Arnold Schwarzenegger warned that the state may have to borrow billions of dollars from local municipalities in order to close the state budget gap.Guerra was part of a coalition of local mayors to meet with the governor, where discussion revolved around how local governments will be impacted if next week's propositions fail at the polls. Guerra said it seemed wrong that a fiscally conservative city like Downey "will have to pay the penalty for the lack of spending controls in Sacramento." "If cities are forced to lend the state their local tax dollars, many cities will have huge layoffs, which will include police and fire. This is wrong on so many levels," Guerra said. "We have worked hard with our fine staff to have a balanced budget for many years, and yet the residents of Downey are being asked to help bail out the state that has spent beyond their resources." According to state law, the governor is allowed to borrow up to $3 million from California cities twice every 10 years "for extreme fiscal hardships." Although the loan is required to be paid back within three years (with interest), Guerra said many cities could go bankrupt if forced to loan the money. City officials are anticipating their own budget shortfall next fiscal year. A hiring freeze was implemented last June, with the exception of police and fire.

********** Published: May 15, 2009 - Volume 8 - Issue 4