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J . . G. A-l \ ERAF from page 1 ................................................. Connecting the Dots? state will still be left with a structural deficit of $6 What some city officials have noticed, hOl.v- billion at the end of the next fiscal year. ever, is the uncanny similarity between the $1.~ Like many city officials, the League has not yet billion proposed increase in ERAF and what the taken a position on the Govemor's bond. The Legislative Analyst estimated this week the state League opposed the use of local sales tax in th.e will save in annual principal and interest costs if FY 2003-04 budget package, and continues to the voters approve Proposition 57 in March, the oppose the reliance on local sales tax to pay the proposed Economic Recovery Bond Issue of up to debt service on the Govemor's bond. The $15 billion. The amount of the savings is also Governor's proposal to shift more of the cost of approximately $1.3 billion annually. The LAO's financing the state's deficit to cities, counties and analysis of the budget points out the bond's annual special districts through a 25 percent-expanded debt service costs of $1.25 billion per year are ERAF is simply one more reason for concern. actually being financed from the '.4 cent sales tax increase arranged as part of the new "triple flip" in OPPOSE ERAF from page 4 .. II · .. · II · Proposition 57, but the resemblance among the various figures is uncanny at best. proposal would increase that loss of local property City officials and others concerned about local tax by about 25 percent on an ongoing basis. services are pondering these questions as they · Voters want an end to "business as evaluate the full meaning of the Govemor's pro- posed ERAF shift. The answers they reach may usual". One of the Governor's promises was to to a great extent determine their willingness to play end business as usual in the state capitol - but a role in supporting or opposing the Governor's taking local properly taxes to plug holes in the $15 billon bond on the statewide ballot two months state's budget is exactly what happened in the from now. early 1990's. The ongoing shift of revenue has exacerbated the state's housing shortages, Local officials' support for Proposition 57 could increased fees for services, and in many cases, be very important: both the Field Poll and a poll by significant cutbacks in services. the Public Policy Institute of California this week found very low levels of support for the bond. The · The economy will be hurt and jobs will policy institute poll shows only 35 percent of be lost. Extending the shift to redevelopment California voters back the measure, 44 percent agencies on an ongoing basis will seriously harm oppose it and 22 percent are undecided. The Field economic development activities in our area, and Poll shows 33 percent support the measure, 40 undermine the Governor's stated goal of restoring percent oppose it and 27 percent are undecided. California business climate, and focusing on "jobs, jobs, jobs". The Field Poll also showed that 60 percent of voters are opposed to the Govemor's plan to take . "No new taxes"? The Governor's pledge $1.3 billion in property tax from local government for "no new taxes" rings hollow if he's merely to finance the state's deficit. shifting the need for new revenue to cities and counties. The Governor and his Administration see passage of the bond measure as critical to their For sample letters, please visit the League's plans to put the state's financial house in order- online Advocacy Center at www.cacities.orq/ even though the Legislative Analyst this week advocacvcenter. found that even if the. bond is approved by voters and the Governor's budget plan is adopted, the Visit the League's Official Web Siteuwww.cacities.org PRIORITY FOCUS/PAGE 5