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<br />'Budget' Continued from Page 1... <br /> <br />8A <br />Page 1 0 <br /> <br />Budget Action Day began with a briefing at the Citizen Hotel that included presentations by <br />league President and Rolling Hills Estates Mayor Judy Mitchell, League Executive Director Chris <br />McKenzie, League Legislative Director Dan Carrigg and League Fiscal Consultant Michael <br />Coleman. Tom Vu, California Special Districts Association legislative director also made a brief <br />presentation. City officials were joined by representatives from the California Special Districts <br />Association as well as approximately 60 firefighters from Sacramento Metro Fire. <br /> <br />State Controller John Chiang addressed the group. The city officials assembled at the Citizen <br />were anxious to hear Controller Chiang discuss the state's cash flow crisis. Previously the <br />Controller has said that he is opposed to borrowing local government revenues to help close the <br />state's budget deficit. <br /> <br />Many of the city officials at Budget Action Day came from the more than 200 cities that have <br />declared a state of severe fiscal hardship. <br /> <br />During the event, the League's regional public affairs managers were armed with video cameras <br />and recorded testimonials by city officials who had not had the opportunity to create a video for <br />www.SaveYourCitv.net. A large group of firefighters recorded a joint video outside the Capitol to <br />tell lawmakers in unison not to take local funds. There are now more than 300 testimonials on the <br />Web site. <br /> <br />Budget Action Day ended with a briefing in the Capitol where the following legislators came to <br />address the League: <br /> <br />Sen. Alex Padilla (D~Los Angeles) <br />Senate Republican Leader Dennis Hollingsworth (R~Murrieta) <br />Assembly Member Alyson Huber (D~Lodi) <br />Assembly Member Cameron Smyth (R-Santa Clarita) <br />Assembly Member Anna Caballero (D~Salinas) <br />Assembly Member Jim Nielsen (R~Biggs) <br />Assembly Member Dan Logue (R-Chico) <br /> <br />Budget Proposal Summary <br /> <br />There have been a number of different budget proposals put forward in recent weeks that would <br />borrow or take local government revenues. Below is a summary of these proposals. <br /> <br />Proposition 1A <br /> <br />Borrowing local government property taxes under Proposition 1A (2004) remains on the table. <br />The Department of Finance (DOF) proposed an 8 percent across-the-board approach. The <br />Legislative Analyst Office (LAO) and others have suggested alternate formulas which could mean <br />that enterprise special districts should lose their remaining property tax shares because they can <br />raise fees. The LAO has also suggested that the Legislature is free to come up with other means <br />of distributing the hits <br /> <br />Transportation Funding <br /> <br />OOF and LAO have proposed both cutting and borrowing local transportation funding as part of <br />the solution to balance the state budget. <br /> <br />OOF proposes to take virtually all of the local share of Highway User Tax Account (gas tax) in FY <br />2009-10 and 72 percent going forward to pay for highway bond debt each year until the debt is <br />retired. The local share would be reduced in most years from $1.03 billion to approximately $300 <br />million. However, in the coming fiscal year, through a formula adjustment involving weight fees, <br />the local share would be reduced from $1.03 billion to just $44 million. DOF claims that the <br />California Constitution (Section 5 of Article XIX) allows the state to take 25 percent of gas tax <br />revenues for bond debt repayment and can take all of this from the local share. This would relieve <br />pressure on the General Fund to pay debt service. <br /> <br />2 <br />