Breaking News: The State strikes again

In an earlier post, I mentioned that there are still a lot of unknowns when it comes to our local budget. Due to these many unknowns, we will likely wait until September to adopt a final budget for this year. One of the key unknowns is what the State of California plans to do to local budgets if the ballot measures fail on May 19.

In today's Capitol Blog, John Myers has reported that the State Department of Finance in its updated "May revision" to the budget is threatening to go after a sizeable chunk of local property tax revenues to help balance the budget.

Here is an excerpt from the post:

The 'Plan B' scenarios if the special election measures are defeated continue to trickle out of the administration of Governor Arnold Schwarzenegger. This afternoon, a new one: the governor is prepared to propose a $2 billion suspension of the 2004 constitutional initiative protecting city and county revenues.
Talk of suspending 2004's Proposition 1A comes on the heels of a meeting yesterday where Schwarzenegger aides told the firefighting community that voters rejecting the measures on the ballot in two weeks time would result in as many as 1,700 firefighting positions.One local government official on this afternoon's call said the plan would be to borrow as much from local governments as Prop 1A allows -- 8% of property tax revenues in the 2008-09 fiscal year, estimated at $2 billion. An aide to the governor confirms the proposal was discussed.
That borrowing would not be easy... or cheap.
The five-year-old constitutional amendment, championed by Schwarzenegger, requires that the money be repaid with interest within three years. It also would require a supermajority vote of the Legislature.
Word of such a plan comes almost five years to the day that Schwarzenegger struck a deal with cities and counties for help back then, in exchange for Prop 1A.
"We have to get our act together as a state," said the governor on May 12, 2004, "rather than always looking to the counties and to the cities and take money away from them."
The suspension of 2004's Prop 1A has apparently been in the works for a while. Earlier this afternoon, I asked the budget campaign team for documentation supporting their new TV ad's assertion that "24,000 firefighters and police" could get laid off if the measures fail.
The document that I received referenced the Prop 1A suspension, and was sent to me before word of the proposal was confirmed by both those on today's call and the Schwarzenegger administration.
All of this is leading to a fairly intense debate as to whether the governor and his team are fairly, or unfairly, predicting dire consequences should the ballot measures fail.

To read the entire post, click here.

For Manteca, the hit would likely be in the neighborhood of $1 to $1.5 million.