Car tax repeal hits city hard Car tax repeal hits city hard (December 19, 2003)

State created a 'fiscal meltdown,' say city officials

By Grace Rauh

Mountain View motorists may pay a lower vehicle license fee in the months ahead, but the rate rollback approved by Gov. Arnold Schwarzenegger will cost the city $6 million through June 30, 2005, city officials said this week.

Although it is not clear exactly what services and positions may be cut to cover the shortage, leaders say police and fire are virtually certain to be on the table.

Vehicle license fee funding supports core city services like the fire and police departments, parks, and the library. City officials say they have tried to keep public safety off the chopping block, but other services are already squeezed down and there are few remaining areas to trim back.

City officials blame legislators in Sacramento for not restoring funding from the vehicle license fee to local governments and forcing them to consider these cuts.

"I have never seen a fiscal disaster in the making like this," said City Manager Kevin Duggan. State legislators "really shouldn't be going off on their holidays without dealing with this issue," he added.

Mountain View will now receive $1.5 million annually from car tax revenue, down from the $4.5 million it received in previous years. The lost funding represents about 4.5 percent of the city's budget.

Luckily, the current budget, which runs until June 30, 2004, has a built-in cushion of $2.5 million that is not part of the city's reserve and was created last year in anticipation of future fiscal problems. But city services will likely be cut or scaled back in next year's budget, said city finance director Bob Locke.

City officials say they are worried and gearing up for a "fiscal meltdown," while Locke said, "The state budget situation has introduced a degree of chaos."

But Mountain View is not alone. The mood among local governments statewide is grim and in Sacramento last week, police and fire chiefs characterized the cuts "as the most significant threat to public safety in the history of California, basically," said Mountain View Police Chief Scott Vermeer.

The cuts in Mountain View will likely be spread across several departments to avoid leaving one with a gaping hole. But "if it was just focused at public safety and if it was just focused at fire, it would be two fire stations that would be closed down," said fire chief Marc Revere.

Over 620 police officer positions have been cut in California already. Another 725 are going to be laid off if the funding is not restored and an additional 2,000 officers will likely see their jobs on the chopping block next year, Vermeer said.

"Among the police chief ranks, it is just a huge, huge concern," Vermeer said.

In light of the dire consequences, Vermeer is somewhat optimistic that a solution will be brokered in the capital. It would be illogical for legislators not to recognize the gravity of the situation at the local level, he said.

The vehicle license fee was increased in October to relieve the state's financial burden without cutting funding for city services. Gov. Arnold Schwarzenegger recently repealed the increase but has not yet said how the state will pay for the lost funding.

Santa Clara County is also being slammed with a $70 million shortfall from the vehicle license fee reductions, and county supervisors approved a plan on Dec. 16 to freeze some capital improvement and technology projects to save money and avoid layoffs.

"We are getting hammered and have to act fast to stop the hemorrhaging," said Supervisor Jim Beall in a statement.

E-mail Grace Rauh at grauh@mv-voice.com

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