AgdaPkt 2003-01-06 - Laserfiche WebLink

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lo. A_� , SUB - COMMITTEE from page 1••••••••••• • ........................•••••• League Executive Director Chris McKenzie spoke of city officials' understanding and appreciation of the state's fiscal dilemma, and their desire to work in partnership with the state in developing budget balancing solutions that leave local governments with the discretionary revenues they must have to make their own tough budget decisions. "It's important to note that this year, cities are net donors to the state," said McKenzie. "The ERAF shift will total about $5 billion in 2002 -03 — $690 million for cities alone. After you credit cities for Prop 172 funds and other dedicated revenues, cities are giving more revenue to the state than they receive. We are, in fad, contributing to the solution." Housing advocates sought to explain the issue of "unencumbered" affordable housing funds. "The Governor's proposal targets what kook like unencumbered balances held by the Low and Moderate Income Housing Fund ", said Jennifer McGovern, testifying today in Sacramento before the Assembly Subcommittee on State Administration on behalf of the Southern California Association of Non -profit Housing. "In fad, these funds are often committed to projects already in the development pipeline. They are the glue that a Redevelopment Agency uses to patch together the matching funds for a much - needed housing project. Without this piece, the package falls apart. "The kicker is that these funds can't be actually encumbered until other pieces are lined up: land acquisition, building permits and other funding sources ", added McGovern. "Seniors, people with disabilities, working families - these are the people who will suffer if this proposal is enacted," said Maureen Higgins of the Affordable Housing Collaborative, a statewide coalition of nonprofit housing develop- ers and homeless shelter providers. "With the recent passage of Prop. 46, California voters sent a dear message about the importance of addressing the shelter needs of these low income Californians. In that context, it's surprising the Governor would even consider wiping out the main source of local affordable housing funding. " "The affordable housing gap in California has become a yawning chasm," said McGovern. "We desperately need to hang on to these funds. If we don't, we will see housing projects around the state that have been years in the making collapse like a house of cards." California State Association of Counties (CSAC) Executive Director Steve Szalay testified about a list of various measures developed by the League, CSAC and their partners in the LOCAL Coalition that can be used to help reduce the state's deficit, without eroding local revenues. These include debt restructuring and borrowing measures; opportunities to secure additional federal funding for critical state and local programs and services; and opportunities to enhance revenues. In this latter category, the LOCAL Coalition will strongly advocate for the reinstatement of the Vehicle License Fee to previous levels — as an alternative to cutting funding for essential local services – as well as other revenue enhancement options. The following day, League President and Oakland City Attorney John Russo testified in Oakland before the Assembly Budget Subcommittee on Transportation about the Govemor's proposal to eliminate $90 million in second, third, and fourth quarter 2002 -03 payments to local agencies for street and road maintenance established by the trans- portation bond fund passed by the voters last March. Mr. Russo pointed to studies that have shown that delaying maintenance today could result in future maintenance costs that are five times more expensive. He submitted informa- tion on numerous examples of cities that must cancel planned road repairs, or stop them midstream, if anticipated state funds are cut off. "Eliminating $90 million in the existing budget year from cities and counties to repair local streets and roads will not only exacerbate our ability to stop further deterioration, but the public will pay 5 times more to fix those roads in the future," said Russo. While local government testimony at the back - to-back budget hearings was successful in telling legislators about the impact of proposed cuts, the effect may have been muted by the Governors announcement on December 18 that the budget deficit was $34.8 billion — significantly larger than the $21.4 billion estimated a few weeks ago by the Legislative Analyst. The Governor's plan to remedy the deficit will not be known until he releases his budget plan on January 10. While the Governor said he planned to propose some revenue enhancements, more and deeper cuts are also expected. PAGE 2 /PRIORITY FOCUS Visit the League's Official Web Site -- www.cacities.org