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New bill yanks cash from cities' general funds

July 1, 2011 12:00:00 AM PDT
Cash-strapped California cities are feeling the pain after Governor Jerry Brown signed a budget bill taking away some state money that would normally go into their general funds. The cuts could bankrupt some smaller cities.

Like Pasadena, most California cities were blindsided by last-minute state legislation that pulled money out of already-bare city budgets. Nearly two-thirds of it will come from public safety budgets such as police and fire.

It's known as California State Bill 89 and it eliminates $130 million in city vehicle license-fee money. More than $530,000 for Pasadena, enough for four police officers and four firefighters.

"A half-million dollars for the city of Pasadena doesn't sound like it will change the course of history, but in fact it comes at the end of this long process where every $50,000 makes a huge difference," said Pasadena Mayor Bill Bogaard.

It makes a bigger difference depending on the size of the city and the budget, according to the League of California Cities.

The league says three newly incorporated cities -- Eastvale, Menifee and Wildomar -- could find themselves bankrupt. Incorporation costs are in the millions of dollars. Now there is an unanticipated loss of hundreds of thousands of dollars.

Brown signed SB 89 as part of the state's budget-balancing mission.

Cities such as Los Angeles with its tax base don't feel much pain from SB 89. The net loss to Los Angeles is $8 million. That's only one-fourth of 1 percent of the city budget.

It will hurt cities such as Pasadena and Eastvale. Pasadena's mayor says they were caught by surprise by what the League being called "stealth" legislation.

"We spent the last six or eight hours of deliberations over a 10-day period concerned with amounts that were less than the amount that we will lose under SB 89," said Bogaard.

For small cities like Pasadena the "stealth" budget cuts can be a problem, potentially serious. But for even smaller rural cities, they can be disastrous.

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