Lawmakers were able to close the budget gap without tax and fee increases, although it did not include a $1-billion proposal to take Highway User Tax Account revenues from local governments, many of which had threatened to sue the state if lawmakers approved the maneuver.
The Senate had approved the proposal, but the Assembly voted it down and negotiated a deal that will solve the gap using $500 million in reserves and will allow Gov. Arnold Schwarzenegger to make up for any remaining shortfall with a line-item veto of the budget, legislators said.
The “gas tax takeaway” would have cost Glendale about $5 million annually, said City Manager Jim Starbird, who had vowed to put up signs on damaged roads identifying local lawmakers who opted to vote for that portion of the budget plan.
“From a local government standpoint, the gas tax not being taken is a tremendous change for us,” Starbird said.
Burbank would have lost $1.7 million this year and another $1.3 million in the 2010-11 fiscal year if the proposal had been approved, but even without it, the city could lose more than $16 million because of the state’s continuing plans to take at total of $1.7 billion in redevelopment agency funds and borrow $2 billion worth of property tax revenues from cities and counties, officials said.
Glendale will lose about $14.5 million because of the maneuvers, Starbird said.
Other officials feared the remaining spending cuts and borrowing from schools, community colleges, local governments and state programs would be devastating.
The reductions will reverse progress at schools statewide, State Supt. of Public Instruction Jack O’Connell said.
