CITY MAY BE FORCED TO LEND STATE $1.8 MILLION
With the failure of four of Gov. Arnold Schwarzenegger’s propositions, the state will likely tap already dwindling property taxes from cities and counties to the tune of $2 billion to ease the state’s budget shortfall.
As a consequence of the nation’s lengthy recession, cities like San Leandro, already scrimping and stretching revenues, face even more tightening of their purse strings. Tuesday’s unveiling of the city’s fiscal budget predicts a shortfall of nearly $4 million for the next year. The city plans to borrow from the general fund, which in itself is nearly depleted with even more tumultuous budget scenarios on the horizon.
The governor’s propositions, designed to reduce California’s budget woes, were overwhelmingly defeated and as a consequence San Leandro could be on the hook for $1.8 million to the state in the form of a short term loan.
Mayor Tony Santos, sounding defiant, charged lawmakers in Sacramento of failing to keep the state’s house in order. “Keep you hands out of our budget,” he said Tuesday night, “They are not doing their job to fix their budget.”
If lawmakers choose to siphon money from municipalities, they plan to repay cities within three years with interest, yet nobody knows what that rate will entail.
Tuesday’s budget, which could be finalized June 1, already features possible cuts in 49 city jobs, which include 26 full-time positions. Finance Director Perry Carter says the goal is to avoid laying off any full-time positions, while he guesses a number of part-time jobs will be reduced in areas such as the library.
The budget could also exacerbate the reduction of city services such as library branches and popular recreational spots around the city such as the possible suspension of services at Farrelly Pool. Regardless, the city faces tough decisions with many facing fierce opposition from the public. A few council members discuss the need to better prepare the city for the likelihood of a worsening financial situation next year and beyond.
“I’m concerned next year will be much, much more worse and we haven’t done anything to prepare the public,” said Vice Mayor Joyce Starosciak. Councilwoman Ursula Reed also added, “Next year, we won’t be worrying about closing not just Farrelly Pool, but all of them,”