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HomeMy WebLinkAboutItem 5.1 League Oppose Fund State Budget CITY CLERK File # D[[][2][Q]-[ID~ AGENDA STATEMENT CITY COUNCIL MEETING DATE: August 5,2008 SUBJECT: Letter from the League of California Cities Regarding the Possible Use of Local Government Revenue to Fund the State Budget Deficit Report Prepared by Richard C. Ambrose, City Manager ATTACHMENTS: 1) Resolution 2) Letter of Correspondence from the League of California Cities, Dated July 22, 2008. 3) Proposed Letter of Opposition to State Leaders 4) Proposed Press Release 5) Proposed Letter to Editors of Local Newspapers RECOMMENDATION:~ Adopt the Resolution authorizing the Mayor to notify State officials ~ about the City Council's opposition to the State taking of local ~ government revenue to fund the State budget deficit, and, if desired, authorize the City to issue a press release and send letters to the editors of local newspapers, expressing the Council's opinion. FINANCIAL STATEMENT: None DESCRIPTION: The City has been contacted by the League of California Cities, which requested that the City express its opposition to State actions that may result in the taking of local government revenue to balance the State's budget deficit. The League is also requesting that the City Council authorize the Mayor to write a letter to the Governor and other State officials to thank them for their continued support in keeping local government revenue whole, especially during this time of budgetary difficulty. In addition, it is suggested that the City request support from State officials in keeping the revenue stream for local governments intact, which will allow the City to continue to provide key services and programs. Finally, the Council may also wish to authorize Staff to issue a press release and send a letter to the editors of the local newspapers, informing them ofthe Council's opinion. RECOMMENDATION: Adopt the Resolution authorizing the Mayor to notify State officials about the City Council's opposition to the State taking of local government revenue to fund the State budget deficit, and, if desired, authorize the City to issue a press release and send letters to the editors of local newspapers, expressing the Council's opinion. COpy TO: Page 1 of 1 ITEM NO. 5./ -.:;'.\r"lIn{'il\AO"pnrf~ ~t~tpmpntc\,)OOSl_"'O()O\~fO:_T P~O"l1P c;;:,t!ltp Rnnopf ~lInn('\rt nAl' 111~ RESOLUTION NO. - 2008 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN ********* OPPOSING FISCALLY IRRESPONSIBLE STATE BUDGET DECISIONS THAT WOULD "BORROW" LOCAL GOVERNMENT, REDEVELOPMENT AND TRANSPORTATION FUNDS WHEREAS, on July 1, 2008, the State Legislature missed its Constitutional budget deadline; and WHEREAS, both the Governor and the Legislative Budget Conference Committee have recommended balanced budgets without resorting to "loans" or seizures of local government property tax, redevelopment tax increment and transportation sales tax funds; and WHEREAS, in 1952, the voters of California approved Article XVI, Section 16 of the California Constitution, providing for tax increment financing for community revitalization - not balancing the State budget, and the voters never authorized the legislature to take or "borrow" community redevelopment funds for State programs; and WHEREAS, in 2004, eighty four percent (84%) of the voters in California approved Proposition lA and sent a loud and unambiguous message to State leaders that they should stop the destructive and irresponsible practice of taking local government funds to finance the State budget and paper over the State deficit; and WHEREAS, in 2006, seventy seven percent (77%) of the voters in California approved another Proposition lA, providing similar protections to transportation funding for State and local transportation projects, including important street maintenance and public transit programs; and WHEREAS, both ballot measures allow the Governor to declare a "severe state of fiscal hardship" and "borrow" these funds if they are repaid in three years with interest, but the Governor believes it would be irresponsible to "borrow" such funds because it would deepen the State's structural deficit and cripple local government and transportation services; and WHEREAS, refusal by the Legislature to carryout its constitutional obligation to compromise on a balanced budget is not a "severe state of fiscal hardship" and would not justify reductions in critical local services, community revitalization programs and infrastructure maintenance at a time when cities are struggling to balance their own budgets during this economic down turn; and WHEREAS, city investments in infrastructure, affordable housing and basic public safety and other community services will create needed jobs and speed our economic recovery; and WHEREAS, the Legislature should balance the State budget with State revenue and respect the overwhelming support of voters for not using local property taxes, redevelopment tax increment and transportation sales tax funds to fund day-to-day operating cost of State programs; and WHEREAS, it would be the height of fiscal irresponsibility to paper over the State structural deficit with more borrowing, and Californians deserve State leaders who will tell them honestly what needs to be done to produce a balanced budget; and l.+e..VVl #' 5. I 8-/5} 08 Y\;\~C~r Attachment 1 \/ J i~ Ib WHEREAS, it is time for the State of California to cut up its local government credit cards and deal with the budget deficit in a straightforward way - by balancing the State budget with State funds. NOW, THEREFORE, BE IT RESOLVED that the City of Dublin hereby opposes any and all efforts by State government to "borrow" or seize local tax funds, redevelopment tax increment and transportation sales tax funds by the State government to finance State operations; such a move would be fiscally irresponsible for the State and hamper effective local services and infrastructure investments. BE IT FURTHER RESOLVED, that the Mayor is authorize to send this Resolution and communicate this Council's strong and unswerving opposition on this matter to our Legislators and the Governor along with an expression of our continued appreciation for the Governor's and any supportive legislator's steadfast opposition to further borrowing or seizure of these funds. PASSED, APPROVED AND ADOPTED this 5th day of August, 2008. AYES: NOES: ABSENT: ABSTAIN: Mayor ATTEST: City Clerk F: ICouncil\Resolutions \RESOL UTION-State Budget. doc LEAGUE OF CALlFORNlA CITIES 1400 K Street, Suite 400 . Sacramento, californ; 9~ Phone: (916) 658-8200 Fax: (916) 658-8240 www.cacities.orq STATE BUDGET ACTION KIT Ib TO: FROM: RE: DATE: California City Officials Chris McKenzie, Executive Director Action Kit for "Cut Up the Credit Card" Campaign for 2008 State Budget July 22, 2008 EXECUTIVE SUMMARY: This communication contains a number of tools for taking action to help convince state leaders to "cut up the local government credit card" as part of this year's state budget negotiations. You are urged to act on these items' immediately, including scheduling action at the next council meeting, adopting the sample resolution opposing this fiscally irresponsible proposal. As you !mow, California is in the midst of a state budget stalemate. In recent weeks, a number of rumors have been circulating that state officials are considering borrowing local government (including redevelopment) and transportation revenues to help close the $15.2 deficit. Last Friday, the Governor confirmed the accuracy of these rumors in an interview with the L.A. Times. In addition to this idea being fiscally irresponsible, the Governor also made it clear that raids on these funds should be avoided because California's voters spoke loudly in 2004 and 2006 when they approved protections for local government and transportation revenues. Friday, July 18, Senate President Pro Tempore Don Perata and Senate Budget Chair Denise Ducheny issued a joint statement reacting to the L. A. Times story saying: "In particular, Democrats have never advocated nor believed in taking money from Propositions lA, 42 and 10." Assembly Speaker Karen Bass and Assembly Budget Chair John Laird also issued a joint statement on July 18, saying that they were not considering borrowing from the voter-approved propositions.! There have been no reassuring statements as of this date from either the Senate or Assembly Republican caucuses. It is very important for city officials to communicate that California cities expect the state to close the state's budget with state funds, not local government (including redevelopment) or transportation funds. Enclosed is a State Budget Action Kit the League developed to help you send the message the state needs to "cut up its local government credit card." The materials will all be hosted on the League's Web site (www.cacities.org/budget2008toolbox).This kit includes: · A sample letter from city officials to the Governor and legislative leadership . Talking points · Sample press statement from elected city officials · Sample letter to the editor · Sample resolution that we urge you to schedule for council action immediately Please work with your League Regional Public Affairs Manager and implement and use as many of these tools as possible immediately as time is of the essence. In a few days, we will have information for you on an additional tool that will help underscore the importance of the state "cutting up its local government credit card." Thanks for all your help. I It is important to note that redevelopment funds were not protected by Prop. 1 A in 2004 because they were protected by a separate voter approved constitutional amendment in 1952. ATTACHMENT 2 Jj ~ lb SAMPLE LETTER July _, 2008 Honorable Arnold Schwarzenegger, Governor Honorable Senate President Pro Tempore Don Perata Honorable Senate Republican Leader Dave Cogdill Honorable Assembly Speaker Karen Bass Honorable Assembly Republican Leader Mike Villines Honorable Members of the Senate and Assembly State Capitol Sacramento, CA 95814 SUBJECT: Adopting a Balanced State Budget without Local Revenues Dear Governor Schwarzenegger, Senate and Assembly Leaders, Senators and Assembly Members: On behalf of the City of , I want to convey to you our opposition in the strongest possible terms to the state taking local government, redevelopment or vital transportation revenues to fund the state budget. Such a move would not only have negative consequences for our cities and their residents, but it is a disastrous fiscal policy for the state. The voters resoundingly agreed that local government should not continue to serve as the source of funding to meet the state's financial obligations when they passed Proposition IA in 2004 with 84% of the vote. They also voted by a 77% margin in 2006 to protect Prop. 42 revenues for the intended purpose - critical transportation infrastructure improvements California has ignored for years. In 1954 the voters also authorized tax increment financing for community revitalization, including infrastructure and affordable housing - not to balance the state budget. Like you, we face difficult choices at the local level during these trying times. Many cities have declining sales tax and property tax revenues. Moreover, cities are on the front lines of the housing foreclosure and gang violence crises. Despite these pressures, we have made tough decisions to reduce programs and services. When necessary, some cities have raised fees or asked the voters to support tax increases. We have found that when we are straightforward with the public about our cities' financial needs, taxpayers are supportive. The state must find a way to resolve its budget problems without "borrowing" or seizing funds meant for voter-approved local government, infrastructure and community revitalization purposes. We understand your options in doing this are limited, and we will support a budget compromise that is balanced and makes progress toward long-term budget reform. These steps are vital if you are going to restore the stability in the state budget and the confidence of our voters and the business community. 61 (G Borrowing or taking these funds to pay state operating costs is simply bad fiscal policy. It compounds the state's structural budget deficit and undercuts both voter and investor confidence III our economy. California city residents are still paying for the years that the state regularly seized city and redevelopment funds when state leaders refused to use only state revenues to balance the budget. The state then started taking Prop. 42 funding for street repairs and transit. Every time the state took funds, cities were forced to defer maintenance and cut important services, lowering the quality of life in our communities in the process. Borrowing or taking money from local communities will not solve the state's problems; it will only prolong the state's ongoing structural deficit and further jeopardize our economic recovery and public confidence in state government. As fellow elected officials, we will support your efforts to enact a balanced budget. We urge you to make the compromises necessary to balance the state budget with only state revenues and respect the will of the voters who said to keep local funds local commit transportation funds to transportation, and invest redevelopment tax increment for the important purpose of community revi talizati on. Respectfully, b 1/G LEAGUE OF CALIFORNIA CITIES 1400 K Street, Suite 400 . Sacramento, California 95814 Phone: (916) 658-8200 Fax: (916) 658-8240 www.cacities.org Budget Talking Points for City Officials PRIMARY MESSAGE: It's time for the state to cut up its local government credit card once and for all THE BOTTOM LINE: The state should balance its budget with state revenues. SPECIFIC MESSAGES: Cities are facing many of the same budget challenges as the state-dropping tax revenue and rising energy costs and we must balance our budget with our own revenues. The state needs to close the budget deficit with state revenues, not by borrowing local and transportation revenues. Borrowing is fiscally irresponsible so cut up the credit card. Borrowing or taking local government (including redevelopment) and transportation funds deepens the structural deficit and harms local services. California voters believe it is wrong for the state to seize local government and transportation funds. A resounding majority of California voters supported local property tax protection in 2004 (84%) and transportation protection in 2006 (77%). In 1952, the voters approved a constitutional amendment providing for tax increment financing for redevelopment, not balancing the state budget. The state has the tools to produce a balanced budget. The state has a variety of viable options to achieve a balanced budget, by increasing efficiencies, cutting spending, and increasing revenues. The current budget situation is not a "severe state fiscal hardship" warranting the borrowing of local government and transportation funds through provisions in Props. 1A and 42. And there are no "loan" or seizure provisions at all in Article XVI, Section 16 of the California Constitution, adopted by the voters in 1952, providing for tax increment financing. Two balanced budgets (the Governor's and the Budget Conference Committee) have been proposed without raiding local government funds and transportation funds. A compromise is within reach. Keep Local Funds Local! Balance the state budget with state funds - not local government and transportation funds that are needed for vital community services, infrastructure and community revitalization. 11ft; SAMPLE PRESS RELEASE It's Time for the State to Cut Up its Local Government Credit Card Once and For All State leaders should use cuts or taxes to close the budget deficit, not take local government funds My fellow Your City City Council members and I are gravely concerned about the state budget stalemate gripping the Legislature. Year after year we watch our state leaders attempting to bring the pieces of the state budget together without ever doing the dirty work of real budget reform. This year is no different, and it is disturbing that not even four years after the voters passed Proposition 1A imposing restrictions on the state's ability to take local money to close the state's budget, this irresponsible option is again on the table. Your city and California's other 479 cities cannot continue to be the state's credit card to borrow on when times are tight. As local elected officials, we face many of the same budget challenges as our state colleagues. The downturn in the economy has dramatically stalled sales tax and property tax revenues and rising energy costs are a great burden on city budgets. These factors have required cites to cut spending, raise additional revenues and focus on the basics of local government. Frankly, elected officials only have two serious options when times are tough-cut spending or increase revenues. Your city has now had to: Outline local impacts in your city here-programs cut, delayed projects, new revenue sources, etc. California cities are still paying for the years that the state regularly took city and redevelopment property tax funds instead of making tough budget choices. The state then took transportation sales tax money, deepening the impacts locally. Every time the state took from us we were forced to defer maintenance and cut programs, straining city services and responsibilities-roads, parks, public safety, libraries and our residents suffered. As the state took from cities to maintain or expand its spending, we were forced to shoulder deep budget cuts and tax increases that should have been the responsibility of the state. Gov. Arnold Schwarzenegger stood in 2004 with local government leaders and the people of California to end the reckless practice of taking local revenues. He spoke loudly saying that the state had to stop taking local government funds to solve its budget problems. Prop. 1A passed with support from 84 percent of voters, giving a clear mandate that local revenues should be left locally, not continuously high jacked by the state. Two years later a second measure to protect transportation funds was supported by the Governor and approved by 77 percent of the voters. The message of these two votes and an earlier one concerning redevelopment funds in 1952 was clear: leave local funds local and use transportation funds for transportation. Prop. 1A allows the state to borrow from local governments only in a "severe state of fiscal hardship." Today's situation doesn't qualify as that; it's a structural deficit that the state must face through a balanced approach which cuts spending and raises revenue. Both the Governor and the Budget Conference Committee have produced budgets that do just that. The Legislature isn't facing a "severe state of fiscal hardship" as much as a lack of political will and leadership. We want our state leaders to be honest with Californians-solving this budget crisis requires sacrifice from everyone. We appreciate the fact that the Governor has continued to stand with cities, protecting local revenues and transportation funds from future raids. He said in April on national television that the state can't steal money from local governments or transportation any more when it runs out. That is what the voters have said they want. That is as it should be. State leaders need to understand that borrowing their way out of a financial hole doesn't address the real problem and is downright irresponsible. It also fails the acid test of leadership: to leave the state ~~ I~ or your city better off than when you arrived. This practice must stop once and for all if we have any hope of rectifying California's structural problems and rebuilding our golden state. Local funds should stay local, and the state should balance its budget with state funds. ~ ~ Ih Sample Letter to the Editor 203 words Tell the Legislature to Cut Up the Local Government Credit Card As legislators grapple with how to close the state's budget deficit, they need to hear loudly that borrowing from local government, redevelopment or transportation is irresponsible. State leaders should use cuts or taxes, not take these funds. Assembly Member (yours) Senator (yours): cut up the local government credit card. Here in Your City we face many of the same budget challenges as the state, and this year has been extremely difficult. Property and sales taxes are down and energy costs are straining our city budget. If the state borrows or takes part of our property taxes or transportation funds, it's going to hurt us even more. Services will be cut and our residents will suffer. The Governor has repeatedly told the Legislature it's wrong to steal local government and transportation revenues to fix the state's deficit. In 2004, 84 percent of voters agreed, passing Proposition 1A to end the reckless seizing of local revenues. Two years later, 77 percent of voters again told the Legislature to fix its own problems and protected transportation dollars. Don't let the Legislature shift responsibility for its chronic inability to do real budget reform to city residents. Cut up the local government credit card once and for all! / 0 ~ Ie, A RESOLUTION OPPOSING FISCALLY IRRESPONSIBLE STATE BUDGET DECISIONS THAT WOULD "BORROW" LOCAL GOVERNMENT, REDEVELOPMENT AND TRANSPORT A TION FUNDS WHEREAS, the July 1, 2008, the Constitutional deadline for the state to approve its budget was missed; and WHEREAS, both the Governor and the Legislative Budget Conference Committee have recommended balanced budgets without resorting to "loans" or seizures of local government property tax, redevelopment tax increment and transportation sales tax funds; and WHEREAS, in 1952 the voters of California approved n 1952 the voters approved Article XVI, Section 16 of the California Constitution, providing for tax increment financing for community revitalization-not balancing the state budget, and the voters never authorized the legislature to take or "borrow" community redevelopment funds for state programs; and WHEREAS, in 2004 by an 84% margin of approval the voters of California approved Proposition lA and sent a loud and unambiguous message to state leaders that they should stop the destructive and irresponsible practice of taking local government funds to finance the state budget and paper over the state deficit; and WHEREAS, in 2006 by a 77% margin of approval the voters of California also approved Proposition lA, providing similar protections to transportation funding (under previously approved Proposition 42) for state and local transportation projects, including important street maintenance and public transit programs; and WHEREAS, both ballot measures allow the Governor to declare a "severe state of fiscal hardship" and "borrow" these funds if they are repaid in three years with interest, but the Governor believes it would be irresponsible to "borrow" such funds because it would deepen the state's structural deficit and cripple local government and transportation services; and WHEREAS, refusal by the Legislature to carryout its constitutional obligation to compromise on a balanced budget is not a "severe state of fiscal hardship" and would not justify reductions in critical local services, community revitalization programs and infrastructure maintenance at a time when cities are struggling to balance their own budgets during this economic down turn; and WHEREAS, city investments in infrastructure, affordable housing and basic public safety and other community services will create needed jobs and speed our economic recovery; and II ~I~ WHEREAS, the Legislature should balance the state budget with state revenues and respect the overwhelming support of voters for not using local property taxes, redevelopment tax increment and transportation sales tax funds to fund the day-to-day operating cost of state programs; and WHEREAS, it would be the height of fiscal irresponsibility to paper over the state structural deficit with more borrowing, and Californians deserve state leaders who will tell them honestly what needs to be done to produce a balanced budget; and WHEREAS, it is time for the state of California to cut up its local government credit cards and deal with the budget deficit in a straightforward way. Balance the state budget with state funds. NOW, THEREFORE, BE IT RESOLVED, that the City of hereby opposes any and all efforts by state government to "borrow" or seize local tax funds, redevelopment tax increment and transportation sales tax funds by the state government to finance state operations. Such a move would be fiscally irresponsible for the state and hamper effective local services and infrastructure investments. RESOLVED FURTHER, that the Mayor/City Manager is hereby directed to send this resolution and communicate this Council's strong and unswerving opposition on this matter to our Legislators and the Governor along with an expression of our continued appreciation for the Governor's and any supportive legislators' steadfast opposition to further borrowing or seizure of these funds. APPROVED this day of ,2008. 1,;/ 1//0 CITY OF DUBLIN 100 Civic Plaza, Dublin, California 94568 Website: http://www.ci.dublin.ca.us August 5, 2008 Honorable Arnold Schwarzenegger, Governor Honorable Senate President Pro Tempore Don Perata Honorable Senate Republican Leader Dave Cogdill Honorable Assembly Speaker Karen Bass Honorable Assembly Republican Leader Mike Villines Honorable Members of the Senate and Assembly State Capitol Sacramento, CA 95814 SUBJECT: Adopting a Balanced State Budget without Local Revenues Dear Governor Schwarzenegger, Senate and Assembly Leaders, Senators and Assembly Members: On behalf of the City of Dublin, I want to convey to you our opposition in the strongest possible terms to the state taking local government, redevelopment or vital transportation revenues to fund the state budget. Such a move would not only have negative consequences for our cities and their residents, but it is a disastrous fiscal policy for the state. The voters resoundingly agreed that local government should not continue to serve as the source of funding to meet the state's financial obligations when they passed Proposition lA in 2004 with 84% of the vote. They also voted by a 77% margin in 2006 to protect Prop. 42 revenues for the intended purpose of critical transportation infrastructure improvements California has ignored for years. In 1954, the voters also authorized tax increment financing for community revitalization, including infrastructure and affordable housing - not to balance the state budget. Like you, we face difficult choices at the local level during these trying times. Many cities have declining sales tax and property tax revenues. Moreover, cities are on the front lines of the housing foreclosure and gang violence crises. Despite these pressures, we have made tough decisions to reduce programs and services. When necessary, some cities have raised fees or asked the voters to support tax increases. We have found that when we are straightforward with the public about our cities' financial needs, taxpayers are supportive. The state must find a way to resolve its budget problems without "borrowing" or seizing funds meant for voter-approved local government, infrastructure and community revitalization purposes. We understand your options in doing this are limited, and we will support a budget compromise that is balanced and makes progress toward long-term budget reform. These steps are vital if you are going to restore stability to the state budget and restore the confidence of our voters and the business community. Area Code (925) . City Manager 833-6650 . City Council 833-6650 . Personr Finance 833-6640 . Public Works/Engineering 833-6630 . Parks & Comrr Planning/Code Enforcement 833-6610 . Building Inspection 833-66;: Attachment 3 Printed on Recycled Paper 13 ~ fCo Borrowing or taking these funds to pay state operating costs is simply bad fiscal policy. It compounds the state's structural budget deficit and undercuts both voter and investor confidence III our economy. California city residents are still paying for the years that the state regularly seized city and redevelopment funds when state leaders refused to use only state revenues to balance the budget. The state then started taking Prop. 42 funding for street repairs and transit. Every time the state took funds, cities were forced to defer maintenance and cut important services, lowering the quality of life in our communities in the process. Borrowing or taking money from local communities will not solve the state's problems; it will only prolong the state's ongoing structural deficit and further jeopardize our economic recovery and public confidence in state government. As fellow elected officials, we will support your efforts to enact a balanced budget. We urge you to make the compromises necessary to balance the state budget with only state revenues and respect the will of the voters who said to keep local funds local, commit transportation funds to transportation, and invest redevelopment tax increment for the important purpose of community revitalization. Respectfull y, 11ayorJanetLockhart City of Dublin )4 ~ IG CITY OF DUBLIN 100 Civic Plaza, Dublin, CA 94568 PRESS RELEASE DATE: CONTACT: PHONE: SUBJECT: August 5, 2008 ~ayorJanetLockhart (925) 833-6650 CUT UP THE STATE CREDIT CARD CAMPAIGN FOR IMMEDIATE RELEASE It's Time for the State to Cut Up its Local Government Credit Card Once and For All State leaders should use cuts or taxes to close the budget deficit, not take local government funds My fellow Dublin City Council members and I are gravely concerned about the state budget stalemate gripping the Legislature. Year after year, we watch our state leaders attempting to bring the pieces of the state budget together without ever doing the dirty work of real budget reform. This year is no different, and it is disturbing that not even four years after the voters passed Proposition 1A, imposing restrictions on the state's ability to take local money to close the state's budget, this irresponsible option is again on the table. Dublin and California's other 479 cities cannot continue to be the state's credit card to borrow on when times are tight. As local elected officials, we face many of the same budget challenges as our state colleagues. The downturn in the economy has dramatically stalled sales tax and property tax revenues and rising energy costs are a great burden on city budgets. These factors have required cites to cut spending, raise additional revenues and focus on the basics of local government. Frankly, elected officials only have two serious options when times are tough- cut spending or increase revenues. California cities are still paying for the years that the state regularly took city and redevelopment property tax funds instead of making tough budget choices. The state then took transportation sales tax money, deepening the impacts locally. Every time the state took from us, we were forced to defer maintenance and cut programs, straining city services and responsibilities-roads, parks, public safety, libraries-and our residents suffered. As the state took from cities to maintain or expand its spending, we were forced to shoulder deep budget cuts and tax increases that should have been the responsibility of the state. ATTACHMENT 4 I!? of IG Gov. Arnold Schwarzenegger stood in 2004 with local government leaders and the people of California to end the reckless practice of taking local revenues. He spoke loudly saying that the state had to stop taking local government funds to solve its budget problems. Prop. 1A passed with support from 84 percent of voters, giving a clear mandate that local revenues should be left locally, not continuously high jacked by the state. Two years later, a second measure to protect transportation funds was supported by the Governor and approved by 77 percent of the voters. The message of these two votes and an earlier one concerning redevelopment funds in 1952 was clear: leave local funds local and use transportation funds for transportation. Prop. 1A allows the state to borrow from local governments only in a "severe state of fiscal hardship." Today's situation doesn't qualify as that; it's a structural deficit that the state must face through a balanced approach which cuts spending and raises revenue. Both the Governor and the Budget Conference Committee have produced budgets that do just that. The Legislature isn't facing a "severe state of fiscal hardship" as much as a lack of political will and leadership. We want our state leaders to be honest with Californians-solving this budget crisis requires sacrifice from everyone. We appreciate the fact that the Governor has continued to stand with cities, protecting local revenues and transportation funds from future raids. He said in April on national television that the state can't steal money from local governments or transportation any more when it runs out. That is what the voters have said they want. That is as it should be. State leaders need to understand that borrowing their way out of a financial hole doesn't address the real problem and is downright irresponsible. It also fails the acid test of leadership: to leave the state or your city better off than when you arrived. This practice must stop once and for all if we have any hope of rectifying California's structural problems and rebuilding our golden state. Local funds should stay local, and the state should balance its budget with state funds. Letter to the Editors of Local Newspapers Tell the Legislature to Cut Up the Local Government Credit Card As legislators grapple with how to close the state's budget deficit, they need to hear loudly that borrowing from local government, redevelopment or transportation is irresponsible. State leaders should use cuts or taxes, not take these funds. Assembly Member Hayashi and Senator Perata: "Cut up the local government credit card!" Here in Dublin, we face many of the same budget challenges as the state, and this year has been extremely difficult. Property and sales taxes are down and energy costs are straining our city budget. If the state borrows or takes part of our property taxes or transportation funds, it's going to hurt us even more. Services will be cut and our residents will suffer. The Governor has repeatedly told the Legislature it's wrong to steal local government and transportation revenues to fix the state's deficit. In 2004, eighty- four (84) percent of voters agreed, passing Proposition 1A to end the reckless seizing of local revenues. Two years later, seventy-seven (77) percent of voters again told the Legislature to fix its own problems and protected transportation dollars. Don't let the Legislature shift responsibility for its chronic inability to do real budget reform to city residents. Cut up the local government credit card once and for all! ATTACHMENT 5 10 ~Ib