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More budget woes loom

Posted: May 17, 2009 9:54 p.m.
Updated: May 18, 2009 4:55 a.m.
 
With almost all the state propositions on Tuesday's special election ballot expected to fail, Santa Clarita officials are preparing to make even deeper cuts to the city budget.

Gov. Arnold Schwarzenegger this week released his May revision to the proposed 2009-10 budget, including the state's potential recourse should the budget-related measures on Tuesday's ballot fail.

If the propositions fail, the state plans to borrow roughly $2 billion from city and county property tax revenues throughout California.

Santa Clarita, as a result, would see a roughly $3 million hole in the $11 million it pulls in annually in revenue.

"We've already cut 8 percent from (department) budgets," city spokeswoman Gail Ortiz said. "We'll have to look at the $3 million and see how we'll be affected. Pretty much anything is on the table."

The last place city officials want to make cuts is in the budgets for public safety, Ortiz said.

City officials are not considering pay cuts or layoffs at this point, she said.

All five budget-related measures are trailing in the polls. Only the sixth, which would cap elected officials' pay during deficit years, was winning majority support.

"To fix the system, I need the people's help," Schwarzenegger said Thursday. "I know that the people are sick and tired of hearing about Sacramento's dysfunction. ... People are angry. People are frustrated."

Schwarzenegger called for laying off thousands of state employees and slashing billions from education to deal with the state's latest budget deficit. He called the cuts painful but said he was left with no other choice as the nation's most populous state sinks further into the fiscal abyss.

He offered no new taxes but proposed some fees for state parks and property owners if the measures don't pass. His budget proposal will go to the Legislature, which has until June 15 to pass a spending plan.

The governor said the state would have to make even deeper cuts if voters reject the ballot measures, as polls indicate they are inclined to do. He proposed cutting education by $5.4 billion and shortening the school year by 7.5 days.

With the deep financial troubles the state faces, a hit to education is expected among local school districts.

"The state is in big trouble and some solution has to be found," said Marc Winger, superintendent of the Newhall School District.

"I have no doubt that we're going to see some reductions."

However, Winger acknowledged the governor's announcements are not final.

"This is not reality," he said. "This is his proposal."

If Tuesday's propositions pass, the Newhall district faces a $1.9 million cut between the current year and the 2009-10 budget, Winger said.

If the propositions fail, the district faces a $3.2 million reduction between the current year and the 2009-10 budget, he said.

The money would most likely come from the district's reserve funds, which are already being built up in preparation for cuts for the coming years.

Stabilization funding from the federal stimulus package will also play a strong role in determining future budget reductions, Winger said.

"That stabilization (funding) will go some distance to fill that hole," he said.

The money will most likely allow Newhall School District to keep programs like music, the arts, physical education and counselors.

Local school districts stand to receive more than $14 million in one-time stabilization funding. The money is meant to backfill the cuts school districts make to meet state budget shortfalls.

Los Angeles County stands to take massive hits as a result of the state's budget mess, said Tony Bell, spokesman for county Supervisor Michael D. Antonovich, "because we provide all the social services that the state mandates us to provide."

He characterized the tax revenue-borrowing proposal as "robbing Peter to pay Paul," and said it will pose a threat to public safety and municipal services including parks and libraries.

"The governor and the Legislature need to look at structural reform," Bell said. "We need a two-year budget so we don't go through this every year."

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