State Money Grab Could Cost San Diego $75M

Local tax proceeds back on table in Sacramento budget battle

By GENE CUBBISON

Updated 9:11 PM PST, Thu, Jul 2, 2009

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Overall, the county and its 18 incorporated cities could lose as much as $250 million to Sacramento.

Getty Images/Steve Bronstein

San Diego Mayor Jerry Sanders is bracing for the prospect of his city losing up to $75 million if an eventual state budget deal includes borrowing and impounding local tax revenues.

"We don't even know where it's coming from," Sanders said in an interview Thursday. "That's how bad the dysfunction [in Sacramento] is."

Sanders is outraged over indications that lawmakers who had previously rejected Gov. Arnold Schwarzenegger's call for using local tax monies to help balance the state's budget are now willing to consider it. Such a move would include borrowing local property taxes and appropriating city and county shares of the state's gasoline tax proceeds.

The League of California Cities has vowed to file a legal challenge over the gas tax issue, claiming the state constitution requires the state to reimburse the money to local governments. San Diego's gas tax revenues, worth about $24 million a year, account for a third of the city's budget for street and road repairs.

"You can't let the state start stealing this money that people in San Diego have paid their fare share of, that goes to local streets and roads," Sanders said. "It's unconscionable to think the state would just rip that money off."

Sanders noted that the city enacted $83 million in cuts in a $3 billion-plus budget for the fiscal year that began Wednesday, including a 6 percent payroll reduction to avoid service cuts.

The longer the governor and legislature wrangle over the state budget, Sanders said, "the debt goes even higher, and you've got to make more Draconian cuts. We don't want to be a part of that game."

The mayor is also disturbed that lawmakers are leaving the Capitol over the three-day July 4 holiday weekend -- many to take part in parades and picnics in their districts.

"It's absolute chaos up there [in Sacramento] right now," Sanders said. "There doesn't seem to be the sense of urgency that everybody around here feels at the city and county level."