State budget may cost city $5.2M

DOWNEY - The city of Downey could be out approximately $5.2 million if legislative leaders pass the proposed state budget plan, city and state officials announced this week.The proposed budget, which is still awaiting passage by legislators, would allow the state to seize local funds, to the tune of $4.7 billion from California cities. Downey would be required to use property tax income to grant a $1.96 million loan to the state. The city would also lose $1.85 million in gas tax funds and approximately $1.43 million in redevelopment funds, according to figures released by Downey Mayor Mario Guerra. Downey has substantial reserves to fall back on, but the city's redevelopment agency may be forced to "make changes and "this will hurt in fixing streets," Guerra acknowledged in an e-mail. "We are so much better off (than) other cities, I cannot state this often enough," Guerra said. "But this will hurt in fixing streets…We still are going forward with an optimistic plan to continue services as best as we can for our citizens. Many local cities will suffer much under this plan and it will be (very) noticeable in a short period of time to many." "I am happy that a budget is finally getting done," Guerra continued, "but very sad that it had to come to hurting so many people because of the neglect and lack of fiscal responsibility in our state capital for so many years…very sad." Meanwhile, the League of California Cities, an advocacy group for state municipalities, called the state budget deal "catastrophic for cities" and blasted it as a "Ponzi scheme" that relies on "Enron-style accounting gimmicks." Raiding cities' redevelopment funds is unconstitutional, the League argued. Also this week, Guerra released unemployment figures for the 17 local "gateway cities." Downey's unemployment rate stands at 9.1 percent, below the county (11.4), state (11.6) and state unemployment rates.

********** Published: July 24, 2009 - Volume 8 - Issue 14