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State: Hey Rocklin, can we get a loan?

City says it would be a severe fiscal hardship
By: Jon Brines, Special to The Placer Herald
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The failure of the statewide ballot initiatives designed to shore up the estimated $23.4 billion state budget deficit is now putting the city of Rocklin between a rock and a hard place. May 5, the Schwarzenegger administration proposed borrowing $2 billion from local governments’ property taxes, of which Rocklin would be required to contribute $1.2 million, according to city documents. “To think any advantage that Rocklin’s fiscal policy has created could be wiped out by an overarching power of the state government is unconscionable,” said Vice Mayor Scott Yuill. Last Tuesday, the Rocklin City Council unanimously approved a resolution finding a severe fiscal hardship that will exist in the city if the tax funds are seized and additional un-funded mandates are adopted by the state. “The city of Rocklin has been more fiscally responsible than most cities, it hasn’t spent recklessly and lives within its means,” Yuill said. The city cut 13 percent of its labor force, offered buyouts for early retirement, froze salaries for union workers and dipped into reserves to bridge its own revenue gap and balance the budget. Even though state law requires repayment of any additional property taxes borrowed from city governments within three years, city officials are doubtful that will happen. “It is irresponsible borrowing,” said City Manager Carlos Urrutia. “They have no idea how they are going to pay it back. That’s not borrowing, it is taking.” Since the early 1990’s, the state has seized more than $8 billion of city property tax revenues statewide to fund the budget. In fiscal year 2007-08 alone the state seized $895 million in city property taxes statewide and an additional $350 million in local redevelopment funds seized in FY 2008-09, according to city documents. The city is now lending its voice to other cities across California, through the League of California Cities to influence the governor and the legislature on this issue. “It’s maddening beyond description that irresponsible and dysfunctional state legislators who can’t control the state’s spending would consider shoring up its mess on the backs of local government,” Yuill said. State Assemblyman Ted Gaines, who represents the city of Rocklin, said he’s on the city’s side and will be working with the governor to make some hard cuts to the state’s budget. “We have to right-size government,” Gaines said. “We can do that by streamlining, consolidating or shutting down agencies that are wasteful. We shouldn’t have to ask local governments to fork over local dollars.” Gaines also is in favor of dismantling the state’s regulatory system and selling state assets to balance the budget. “San Quentin (prison) is worth over a billion dollars, we ought to sell it and build a new prison with a lower cost per bed somewhere else,” Gaines said. Gaines said additional revenues could be gained by allowing oil companies to drill newly- discovered oil fields. But Gaines said tax increases are out of the question for him. “The people have spoken on May 19. They made it clear they don’t want their taxes increased,” Gaines said. “So we need to work within our means and balance the budget without raising taxes and without taking it from local governments.” For now, city officials are waiting for the state to act this summer and hopefully avoid the proposed $1.2-million liability to the city’s budget. “We’ve cut as much as we can cut without getting down to bare bones that will start to affect programs,” Urrutia said. “All cuts from now forward will have a definite impact.”