City loses big in new budget City loses big in new budget (January 16, 2004)

$1.2 million lost, while schools are spared in Governor's spending plan

By Julie O'Shea

Gov. Arnold Schwarzenegger's first stab at the state budget has sent shockwaves through Mountain View, as city officials try to understand and accept a proposed property tax takeaway that could leave them $1.2 million in the hole.

On the flip side of the coin, the governor's proposal has the city's K-12 education system walking away virtually untouched. However, students attending Foothill and DeAnza Community Colleges will suffer a substantial 44-percent fee hike if the state Legislature supports the governor's proposed budget.

On Jan. 9, Schwarzenegger unveiled a $76.1-billion budget that will take $1.3 billion in property taxes and redevelopment fees away from local governments and $2 billion from education as a way to help close a $15 billion deficit gap.

While the California Teachers Association praised the governor's plan last week, officials in Mountain View City Hall were seething.

"We understand the state has a tremendous challenge," City Manager Kevin Duggan said, but "we think it is fundamentally unfair to shift part of their deficit to us."

The announcement of a proposed $1.3-billion state takeaway, which would mostly come from property taxes and city redevelopment fees, came only weeks after Schwarzenegger repealed the vehicle license fee, a move that incensed local governments. The governor later made $150 million in spending cuts to the state budget in order to replenish the funding loss from the rollback of the vehicle license fee, or car tax.

"It's like giving with one hand while being pickpocketed by the (other) hand," said Mountain View finance chief Bob Locke. However, Locke added he'd rather give up $1.2 million in property taxes than fork over the $4.5 million the city would have lost if Schwarzenegger hadn't restored the vehicle license fee revenues.

"It's not their money," City Council member Mike Kasperzak said of state lawmakers. "Why they think they can balance their budget by taking money from local governments is beyond me.

"The people of Mountain View and around the state should be mad as heck," Kasperzak added.

Even if the proposed state cuts don't get passed, Locke said Mountain View will have to slash $2 million from its 2004-2005 budget.

"I think the governor is forcing us to look at reduction in (public) safety," Locke said. "These are going to be direct impacts to employees. It will be much more noticeable to residents."

City departments turned in their budget reduction plans last week. Locke noted that police and fire represent almost 50 percent of the city's operating budget and are logically prime targets for the chopping block.

Although the state would take $2 billion from the schools' sacred Proposition 98 funding source, Mountain View-Whisman Superintendent Jim Negri said he's not too worried.

"Education has pretty much been taken off the table," Negri said. "Last year, we were facing uncertain mid-year cuts," something school districts would avoid under the current proposal.

Still, Negri said he realizes the state budget is in its infancy, and things could change by May, when the governor revises his proposal.

"It gives us a direction," Negri said. "So much of it is based on the (March) ballot or if the economy will come back to a certain level."

Gov. Schwarzenegger has placed a $15 billion "recovery" bond measure on the March ballot that he says is essentially for pulling the state out of its financial slump. Also on the spring ballot is a $1.6 million parcel tax for Mountain View-Whisman School District.

"Right now, I am still looking [at the budget] in very general terms," Negri said. "We need to see some more detail."

Things are a little bleaker at the Foothill-DeAnza college district, where Chancellor Martha Kanter sent out an all-staff memo detailing the fee increases. Kanter estimates students will have to pay $17 per quarter unit, up from $12. Students who already have degrees in higher education would pay $33-$50 per unit.

"It is an unfortunate proposal," Kanter wrote in her memo, "because many of these students have been displaced from their jobs and are seeking retraining or new careers in order to reenter the workforce."

But as Locke warns, nothing about the state budget is certain until the final legislative vote, which is supposed to take place by July 1.

"This is just kind of like the opening statement from the governor of what the budget should look like," Locke said. "To overreact to the (current) budget is premature."

However, Locke added, "we are pretty much in uncharted territory here in California, with a celebrity governor and an antagonistic Legislature."

E-mail Julie O'Shea at joshea@mv-voice.com

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