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Manteca taking $7M hit

State budget costing $1M-plus in property tax, $6M in RDA receipts

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Manteca taking $7M hit

Some $6 million Manteca residents have paid in property taxes to go for infrastructure and affordable housing will be seized to help cover the state's $26.3 billion deficit under the new California...

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POSTED July 30, 2009 1:51 a.m.
By DENNIS WYATT
Managing editor of the
Manteca (Calif.) Bulletin
Manteca’s tab for two decades of the state’s inability to spend within their means will soon top $25 million.
In the biggest money grab yet, the budget deal signed into law by Governor Arnold Schwarzenegger Tuesday includes hijacking over $1 million in Manteca property tax receipts plus another $6 million in Manteca redevelopment agency funds.
It will bring the total the state has taken from Manteca alone since the 1990s to solve a perennial string of deficits to just over $25 million. This year’s commandeering of local tax receipts alone is the equivalent of $93 for every one of Manteca’s 65,000 residents.
City Manager Steve Pinkerton noted that unlike many RDAs the Manteca agency has the cash on hand. That money, though, has been accumulated to finance a wide array of projects from infrastructure such as road improvements to affordable housing in a bid to stimulate economic growth and fight blight. All of the money was collected on local property owners who are within the boundaries of the RDA.
Statewide, the hit on RDA funds is expected to exceed $1.7 billion and stop numerous infrastructure and construction projects forcing the elimination of 164,000 private sector construction and related jobs. As in the past, the state has no intention of paying the money back.
California’s redevelopment agencies are suing the state to stop the money grab. In May, the state’s RDAs won a court decision that basically ruled it was unconstitutional for the state to take the RDA funds. The California Legislature simply crafted different language as a way to get around the court decision.
“That is why people don’t like taking on the state,” Pinkerton said in reference to trying to maneuver around the court’s RDA decision.  “They’re taking three times as much now as they proposed before. You win but they make sure you lose even bigger.”
Even though the $6 million grab from the RDA is going to hurt it won’t inflict as much damage in the city’s ability to stay in the black as the decision to take $1 million plus in property tax collection behalf of the city by San Joaquin County and shifting it to help bridge the $26.23 billion deficit in Sacramento.
It pushed Manteca’s deficit for the current year up to around $3 million. The $1 million theft of property tax is the equivalent of paying for nine law enforcement officers with complete benefit packages.
Manteca already is dealing with a 9 percent drop in sales tax receipts plus property tax receipts will drop 14.7 percent for the coming fiscal year at the same time the state is taking $1 million.
Pinkerton said the city expects to spend much of August meeting with employee bargaining groups to try and find ways to cut costs to balance et budget.
Employees have already taken a 3.8 percent pay cut starting July 1 that is being accomplished through unpaid furlough days. That move will save the city $1.2 million. The pay cut will be distributed throughout the fiscal year but most of the actual forced furlough days will occur during the holidays resulting in closing city hall for the week of Thanksgiving and the week after Christmas.
Essential employees such as police, firefighters, refuse workers, as well as sewer and water workers will have their unpaid furloughs spread out during the course of the year.
The budget news out of Sacramento could have been worse. The counties and cities successfully blocked an attempt to hijack the entire remaining local share of gas tax that the state hadn’t taken in previous deficit covering moves. Had that happened, Manteca would have lost at least $1.2 million this year and $1.2 million next year.
The money is used to pay for street maintenance crews and the materials they need to maintain city streets.
To contact Dennis Wyatt, e-mail dwyatt@mantecabulletin.com


 

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