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9A Page 2 `Budget'Cantlnued frore�Page 1.., The committee rejected a Legislative Analyst's�ifice(l.AO)proposal to borrow Prop.42{sales #ax on gas)funds.The committee aiso approved#he release of$7QQ miliion in remaining Prop. 1 B local s�ree#and road funds, of whlch$258 million remains ava�lable for cities. No ac#ion has yet been taken by#he committee on the Governor's proposaf to borrow Iocal property taxes under Prop. 1A.The committee also left open ar�l.AO proposal#o take half of the VLF money dedicated to loca!public safety. In Friday's 6udget Conference Committee meeting, members received new traifer bill lartguage from DOF that proposes to borrow the funds through an ERAF shift#o get around the maintenance of effort requ�rements. Beca�se the members received the trailer biil language within minutes of the discussion begi�ning,the commi�tee closed down the meeting and continued the discussion an borrowir�g property taxes untif some#ime over the weekend or Monday. Piease read"Sttmmary of MaJor Budget ftems Affecting Cities"for more information.This � document has been posted on the�eague's Web si#e. htta;!/www.cacities.oralresource f1es128111.June 1�budqet update.�df The committee mee#ings.th'ts week foffow a great deal of activi#y by the Leag�e and city officiafs to fight proposals to borrow local property taxes as weE�as take these funds. f..AQ had proposed borrowing locai HUTA re�enues for one year,which is authorized by the Consti#ution, but#his proposai was rejected during the discussion.While these funds go to transportatlon ps-ojects,if the state takes them, lt wi1!have implications beyor�d what they traditional�y support.The"Big Ci#y"mayors ta[d Gov.Amold Schwarzenegger on Tuesday that loss of these#unds would impact publi�safety because cities would ha�e to supplement transportat�on pr�jec#needs from the General Fund. Ano##�er rippfe etfect of the state talcing or borrowing HUTA is the po#ent�al viofation of city storm wa#er Na#ional Pollutant Discharge Eliminatinn System(NPDES}permits.A number of cities use their HUTA funds for street sweeping and street maintenance. In addition,many of the Gty starm water NPDES permits speciftcally state that the cfty must sweep the stree#a speci�ed number of #imes per week and list specific maintenance projects in ti�e permits. If HUTA funds are taken,cities would be fiorced to bacicfill the funds required to do stree# sweeping and main#enance from o#her sources.Without the abifity to fund street sweeping or maintenance, cities could fall out of compliance wi#h their NPDES permit fairly quickly. A large transportation coalition sent the Govemor a letter on Friday,June 5, calling the proposal to divert andlor borrow gas taxes to close the budget gap fiscaf[y reckless.The League joined this coalition and has posted a copy of this letter on the League's Web site. htt ://www.cacities.or /resource files128102.June 2Q09 Join#CoalitionLetter No42Barrowin 6 5 0,9�,pdfi While Thursday's action by the Conference Committee wiil have many severe consequences an loca#street and road programs, several things could alter this course: 1. The budget�ight may bog down on other provisions,giving local government, transportation groups,affected locai employees and lacal residents time to rally opposition to change or reverse#his proposal. 2, The Republi�ans have the ability to hold out with the two-thirds vote, but same Repubiicans on the committee indica#ed that they would suppor�a one-year grab of these #unds. 3. Big-Five discussion may alter shape of the final dea! (there has been some discussion of the need to lncrease stafe fees or gas taxes.} 4. TF�e League's fega{opinion on the unconstitutionality of this proposal wil! 6e shared soon with the Governor,and may change his mFnd about the�iability of this proposal. 2