Budget impasse riles leaders

Deirdre Newman

City officials are incensed that the deal the California League of

Cities negotiated with Gov. Arnold Schwarzenegger in May to prevent

the state from raiding cities’ coffers over the long term is being

opposed by Democrats in the legislature. The opposition has caused an

impasse over the state budget.

Mayors from both Newport Beach and Costa Mesa fired off missives

to legislators over the past few days urging passage of the deal,

which calls for constitutional protection of local revenues over the

long term in exchange for cities surrendering a total of $2.6 billion

dollars to the state over two years to help balance the budget.

And they reiterated their frustration -- which has reached the

breaking point -- with the legislature’s tendency to take from cities

to balance the state budgets. The more the state takes away from

cities, the less they are able to pay for essential services like

police and fire, Costa Mesa Mayor Gary Monahan wrote in letters to

the Democratic leaders of the state Senate and Assembly.

“It’s time for the legislature to realize that the cities and

counties provide the day-to-day services to the people of California

and they need to allow us the ability to do that without constantly

taking away the funds that we have,” Monahan said.

Newport Beach Mayor Tod Ridgeway also expressed his dismay at the

stalemate.

“I think it’s unfortunate there’s an impasse,” Ridgeway said.

“That means from the governor’s side, there won’t be protection of

cities and local governments.”

The Democrats in the legislature don’t have anything against

cities and counties -- they just don’t believe in making such a

binding commitment with any group, said Jim Toledano, former chair of

the Orange County Democratic party.

“Every intelligent legislator you’ll talk to will admit: You have

all these things that are set in stone by constitutional provisions,

most of which were initiatives, and so you have very little

maneuvering room. So it would be totally irresponsible for the

Democratic majority to agree to let any group, no matter how

deserving, have a permanent pass without any tax increases.”

Schwarzenegger had found middle ground with Democrats in recent

weeks that would allow the state to take city and county funds during

fiscal emergencies.

On the verge of a budget agreement with legislators on July 2,

negotiations broke down when cities and counties found out about the

compromise and accused the governor of reneging on his promise to

protect their funding.

After adamant protests from cities and counties, Schwarzenegger

backed down the same day and urged legislators to approve his

original deal. As of Saturday, the state has gone 10 days into the new fiscal year without a budget.

Several Southern California Democratic legislators could not be

reached for comment by press time.

Republican Assemblyman John Campbell said the mood in Sacramento

among legislators was shock, not bitterness, since the budget

negotiations had been going so well.

“I think no one expected to be hung up over this issue,” Campbell

said.

The fact that Democratic legislators still feel they should have

access to city funds when they deem necessary is galling to the city

managers of both cities.

“They just don’t want to be accountable for their state budget,”

Costa Mesa City Manager Allan Roeder said. “They want to keep it

open, so any time there’s a tough decision, they can sidestep it by

taking money from the cities. They’ve been taking it for the better

part of 15 years. That’s why cities have just said, ‘Enough!’”

Newport Beach City Manager Homer Bludau said it was also time for

Democratic legislators to stop swapping certain local revenue, like

sales tax, for another one, like property tax.

“The discussion is, ‘We’ll make sure you’re made whole, but don’t

depend on any one revenue source because it may be in our benefit to

take your property tax and give you something else in return,” Bludau

said. “We’re just saying, ‘That’s just playing games with local

government.’”

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

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