AgdaPkt 2006-01-23 - Laserfiche WebLink

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!?//-ð GROWTH PLAN from page 2 . . . . . . . .. DETAILS from page 1.............. Continued Structural Budget Deficit. The governor also stressed the importance of contin- ued fiscal discipline. Reminding his audience of legislators, state constitutional officers, Supreme Court justices and others that the state still has a structural budget deficit, Gov. Schwarzenegger called for a state constitutional amendment to set a 6 percent ceiling for the state's debt service ratio. He also called for continued efforts at budget reform. Acknowledging that the voters rejected his ballot measure proposal for budget reform (Proposition 76) last November, he asked legisla- tors to "tell me how you would do it." "Work with me," the governor said. "Autopilot spending will send us into the ground, not into the future. We have not other choice but to prepare for our future." Infrastructure Funding is a Key League Goal. The League's first strategic goal for 2006 calls for greater state and local investment "in the physical infrastructure of California, including, but not limited to, its roadways, bridges, levees, parks, libraries, and systems for delivering and treating water, wastewater and storm water." "We applaud the governor's vision, and his willingness to tackle the silent deficit in infrastruc- ture needs that state policy makers have largely ignored for years," said League Executive Direc- tor Chris McKenzie. "We also heartened by the infrastructure proposals put forward by Senate Pro Tempore Don Perata's and Assembly Speaker Fabian Nunez, which show a similar commitment to tackle our infrastructure deficit." "Cities will be carefully watching as details emerge, to ensure that significant portions of infrastructure funding are made available for streets, roads, transit systems, libraries, levees and other local infrastructure needs," McKenzie added. Visit the League's Official Website-www.cacities.org While the League strongly supports expanded state investment in infrastructure, our initial analy- sis identifies several areas where city officials will want clarification. These include the following: Transportation and Air Quality The proposal assumes $107 billion in funding for transportation and air quality over the next 10 years, of which $47 billion would come from existing sources and $48 billion from new funding sources. The existing funds include those from Proposition 42, which voters passed in 2002 to dedicate the sales tax on gasoline to transportation projects, including funds set aside for cities and counties to repair local streets and roads. The proposal includes plans for a constitutional amendment to "lock in" Prop. 42 funds for trans- portation purposes - a proposal that the League strongly supports. This change would end the practice of transferring Prop. 42 funds to the state general fund in times of fiscal crisis. Will Prop. 42 Funds for Local Street and Road Repairs Be Reduced? The current Prop. 42 funding formulas call for the city/county annual share of funds for local street and road repairs to increase, beginning in FY 2008-09, from the current level of $127 million for cities and $127 million for counties, to $280 million for cities and $280 million for counties. These amounts would then grow over time as revenues in increased. The Strategic Growth Plan suggests that cities and counties would be capped at their current allocation levels, with the additional funds allocated instead to state projects. The plan notes that reducing the local allocation would require a two- thirds vote. The League is attempting to clarify this issue with the Department of Finance and with the governor's office. No Proposal to Change Vote Requirements for Local Transportation Sales Tax Measures. In the area of "new funding sources," the Strategic Growth Plan assumes $9 billion from "extended/ Continued on Page 4 PRIORITY FOCUS - PAGE 3 January 6, 2006 - Issue #1