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Santa Barbara Officials Oppose State Plan to Tap Local Revenues

City leaders send letters urging California legislators to find other options for closing a $15.2 billion deficit.

In recent weeks, Santa Barbara officials have learned that the state of California is considering borrowing local government general funds and transportation revenues to help close the state’s $15.2 budget deficit. The city of Santa Barbara has sent letters to state legislators in strong opposition to any state plan to borrow local government revenues.

The city opposes the state budget plan for the following reasons:

» Cities are facing many of the same budget challenges as the state and can ill afford the loss of critical local property tax revenue. The city of Santa Barbara is required to balance its budget with local revenues. The state needs to close its budget deficit with state revenues, not by borrowing local property tax and transportation revenues.

» Borrowing local government funds, including funds from redevelopment agencies and transportation funds is fiscally irresponsible and only deepens the state’s structural deficit. The proposal defers the state budget problem to future generations of Californians, while harming local services.

» California voters believe it is wrong for the state to seize local government and transportation funds. A resounding majority of California voters supported local property tax protection in 2004 (84 percent) and transportation protection in 2006 (77 percent).

The state has the tools to produce a balanced budget. The state has a variety of viable options to achieve a balanced budget, by increasing efficiencies, cutting spending and increasing revenues. The current budget situation is not a “severe state fiscal hardship” warranting the borrowing of local government and transportation funds through provisions in Propositions 1A and 42. 

In 2004, Gov. Arnold Schwarzenegger stood with local government leaders and the people of California to end the practice of taking local revenues by supporting Propositions 1A and 42. The city appreciates the fact that the governor has continued to stand with cities, protecting local revenues and transportation funds from future raids.

The city of Santa Barbara is encouraging California leaders to balance the state budget without borrowing local government funds. Local general funds and transportation revenues are needed for vital community services and infrastructure in Santa Barbara.

For more information on the effects of the state budget proposal, call Finance Director Robert Peirson at 805.564.5335.

Robert Peirson is finance director for the city of Santa Barbara.

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