Deirdre NewmanCity leaders and managers reacted with...

Deirdre Newman

City leaders and managers reacted with an air of resignation to Gov.

Arnold Schwarzenegger’s budget on Friday.

The governor’s plan would take a $1.3 billion chunk from local

governments’ property taxes in the 2004-05 fiscal year.

That translates to a loss of about $1.1 million for Costa Mesa,

City Manager Allan Roeder said.

Mayor Gary Monahan said he wasn’t surprised by the hit to local

governments. He said he doesn’t agree with some of his colleagues in

other cities who are hysterically mad at the state scooping more

property tax dollars out of local coffers. No one is immune as

Schwarzenegger tries to dig California out of the dire financial

straits caused by his predecessor, Gray Davis, Monahan said.

“The state is in a huge hole,” Monahan said. “It’s not Arnold’s

hole. It’s been coming for three to five years, and finally, God

bless him, somebody is attempting to fix it instead of trying to put

it off another year and make it one year worse.”

Both Monahan and Roeder stressed that Schwarzenegger’s budget is

only a starting point. In the subsequent months, the Legislature

still needs to put its mark on the budget before approving it.

On the positive side, Schwarzenegger’s budget calls for giving

cities $4.1 billion to reimburse them for the reduction in car tax

funds, Roeder said.

“The good news is it could have been a lot worse,” Roeder said.

“But this may just be kind of the first dart on the dartboard,

because you just don’t know.”

Roeder said one of the most frustrating things about the state

taking a portion of cities’ property tax funds is that they have been

doing it for almost two decades. And cities did nothing to contribute

to the state’s downward economic slide, he added.

“So it’s easy to understand a lot of the resentment at the local

level,” Roeder said. “Having said that, I think we all pretty well

understand the magnitude of the state’s budget situation and that

it’s pretty much impossible to believe that they’re going to be able

to dig their way out without having to cut pretty much everybody.”

The state’s depressed financial situation will be exacerbated if

Schwarzenegger’s Economic Recovery Bond does not succeed in March,

Monahan said.

“It’s critical to pass that,” he said. “There’s still $15 billion

over budget that needs to be cut. Secondly, there’s another $8

billion that is coming due that Gray Davis was hiding with smoke and

mirrors.”

* DEIRDRE NEWMAN covers Costa Mesa. She may be reached at (949)

574-4221 or by e-mail at deirdre.newman@latimes.com.