Cities prepare for tough budget cuts

Paul Clinton

City leaders are bracing for more fiscal headaches as a result of the

state budget compromise now sitting on Gov. Gray Davis’ desk.

The nearly $100-billion plan approved by the Legislature on

Tuesday, which closes the bulk of the $38-billion budget gap via

heavy borrowing, is expected to drain city coffers without cleaning

up the budgetary mess, city managers in Costa Mesa and Newport Beach

said.

As part of the compromise deal, the state government is taking

away another $1.2 billion from cities and counties across California.

Because of this move, Newport Beach leaders now plan to receive

$933,000 less revenue over the next four months.

The compromise plan, City Manager Homer Bludau said, doesn’t go

far enough in reducing the red ink that has severely damaged the

state’s credit rating and drained revenue from cities, schools and

other groups that rely on state funding.

“It’s just procrastinating the tough decisions that will need to

be made next year,” Bludau said about Tuesday’s deal. “It’s too bad

that nothing has been solved.”

Legislators have promised to return the revenue, derived from

car-tax revenues between July and November, in 2006. But it’s not a

guarantee, Bludau said.

Newport Beach had already excluded the revenue from its budget

planning, allowing city officials to stick to the budget already put

in place.

In Costa Mesa, budget reduction measures will need to be

considered, City Manager Allan Roeder said. Effective this week,

Roeder installed some “interim budget controls.” Those include a

freeze on high-dollar equipment purchases, a hold on some maintenance

projects, a suspension of voluntary training and a curtailing of

overtime hours.

“Clearly, I’m sure with virtually all the cities, we will have to

go back and amend our budget,” Roeder said. “There’s simply no way

anyone could accurately anticipate what the state might do in terms

of their budget planning. We will make whatever adjustments are

necessary.”

Roeder also said the budget revisions won’t be ready for Monday’s

City Council meeting.

Locally elected state leaders offered differing views on the

budget. State Sen. Ross Johnson, who represents both cities,

supported the compromise deal a week ago.

Newport Beach’s assemblyman, John Campbell, who has led the GOP

fight against Davis’ decision to hike vehicle registration fees,

opposed the deal Tuesday. Costa Mesa Assemblyman Ken Maddox is

serving an Army National Guard obligation and did not vote on the

plan.

Campbell said he hoped for no new taxes, reductions in spending,

structural reform and payoff part of the deficit.

“We got one out of four,” Campbell said, referring to the absence

of hikes in income, sales or tobacco taxes.

And even when Davis signs the new budget either today or tomorrow;

there will still be much work for legislators next year.

“California’s fiscal crisis is not solved,” Campbell said. “If

this is a football game, we’re not even at halftime.”

* PAUL CLINTON covers the environment, business and politics. He

may be reached at (949) 764-4330 or by e-mail at

paul.clinton@latimes.com.