Manteca is teaming up with other California cities as well as counties in a bid to have voters approve a ballot measure in the November 2010 election to effectively stop Sacramento from raiding funding sources for local government to balance the state budget.
The threat of more pilfering of city and county general funds increased significantly just a week after the City Council voted earlier this month to support the League of California Cities sponsored measure dubbed the Local Taxpayer, Public Safety and Transportation Protection act of 2010.
Manteca leaders are cautiously optimistic that if revenue and expense trends hold they can avoid major cutbacks in the 2010-11 fiscal year. Major cutbacks will happen, though, if the state again swipes money from local jurisdictions.
At the time of the council’s vote, the state had a projected $8 billion deficit just two months after adopting a budget legislators claimed was balanced. Today, that deficit is now estimated at $22 billion and that figure is expected to go even higher.
Since 1990, the state has raided Manteca’s redevelopment accounts and general fund for nearly $18 million.
Manteca this fiscal year alone is losing $7.6 million to the state - $1 million in property taxes and $6.6 million in redevelopment agency funds.
The city was able to securitize the $1 million which now means the state can’t wiggle out of its commitment to repay it. The city joined other municipalities in putting together a bond measure that would give them the money now. That means instead of the state repaying the cities and counties in two to three years they would have to repay the bond holders. While the state has routinely reneged on paying back money it said it would in past years that was taken from local government, the courts have consistently ruled the state must pay bond holders first.
If the city didn’t securitize the money the state took, it would have had to resort to laying off 10 to 12 more municipal workers in the current fiscal year.
The RDA money was set aside for various Manteca economic development projects such as interchange improvements that the state will no longer fund. Ironically, the state is requiring local jurisdictions to come up with the money for such improvements with RDA taxes being one of the few ways to pay for the share that is borne by existing residents without seeking bonds.
The California Redevelopment Association won a lawsuit in April blocking such a raid. The state dropped its appeal in that lawsuit making it binding but then simply turned around and changed the language and passed a new bill. The CRA has since filed another suit in responded to the new legislation.
City Manager Steve Pinkerton has noted should the CRA prevail he fully expects the state to come back at the cities to get the money from general fund sources.
The proposed ballot measure would protect locally imposed taxes such as motel room taxes, parcel taxes, utility taxes, and sales taxes such as Measure K (countywide transit tax) and Measure M (Manteca’s public safety tax) from being touched by the state.
The ballot measure would also prohibit the borrowing or stealing of public transit funds, Proposition 42 gas tax, HUTA gas tax or redevelopment agency funds.