California state budget now shows a $27 billion deficit

"Clearly it's a big take from local government, it's a big take from San Jose, it's a big take from Santa Clara County -- it'll have a very negative impact on the people of San Jose, but the state makes the rules and apparently they're going to take our money," said Mayor Reed.
No numbers are known yet, but San Jose anticipates the state will draw about $100 million from local revenues. Monies will be pulled by suspending Prop 1A, in order to take from property and sales tax revenues. Gas taxes will be borrowed and so will funds from the redevelopment agencies. The state is going to have to brace for a fight.
The constitution of the state does not allowing taking of redevelopment money, and furthermore, they're proposing to take highway users' tax money, which is also unconstitutional, so this is just a giant Ponzi scheme," said Dan Furtado, Campbell City Councilmember.

I know, but the problems are exacerbated by the local governments also over-spending, even during good economic years. All they know how to do is spend, spend, and spend. They don't know how to save for that rainy day, and they keep increasing payroll and benefits to the point where they don't have any room to be flexible, and are always afraid to fire people to save cost. They all play budget games by borrowing from Bill to pay Paul, and they think they'll be able to sustain playing games forever. How do they manage their home budgets? Credit cards.

SANTA CLARA COUNTY BUDGET:
Santa Clara County approves painful budget cuts to close $273 million deficit
By Denis C. Theriault
Mercury News
Posted: 06/19/2009 06:05:37 PM PDT
Updated: 06/19/2009 09:59:35 PM PDT
The Santa Clara County Board of Supervisors on Friday reluctantly took an ax to the health programs at the heart of the county's budget, unanimously approving a spending plan for the next fiscal year that closes a $273 million deficit.
Among the most dramatic cuts, almost a quarter of the health department's regional nursing staff " nearly two dozen nurses " will be lost. That reduction comes even as the swine flu pandemic highlights the vital role played by the county's health department.
In addition, mental health treatment for uninsured children and adults has been pared back, and substance abuse treatment programs have been sharply curtailed.
The board, however, made no cuts to the county's public safety budget, which funds the jails and the district attorney's and sheriff's offices. And it restored $1.3 million in proposed cuts for social service nonprofits that rely on county assistance to care for low-income residents, seniors and others.
"We're cutting into our direct services to the public," Board President Liz Kniss said.
The vote on the county's $2.2 billion operating budget for the fiscal year beginning July 1 ends weeks of intense deliberations. Members of the public pleaded with the board to spare a passel of programs targeted for reductions.
But as supervisors weighed those concerns " especially with another round of state cuts looming " they said they had little choice.


SAN JOSE CITY BUDGET:
As this Proposed Budget is being developed, the City of San Jose faces declining revenues of historic proportions. Sales Tax, Property Tax, Transient Occupancy Tax (fOT), and development related fees and taxes are all down significantly, along with airport passenger traffic levels. Readers of this message will ,find a combination of strategies designed to deal with the significant funding shortfall:
1) service reductions and eliminations; 2) revenue increases, use of reserves, and funding shifts; 3) costs savings and new service delivery models; and, 4) initial steps to flatten the management structure of the organization. In addition, a number of two-year strategies are employed to ease the immediate impact of some proposals and provide time for a transition. Additionally, the planned opening of several new facilities will be delayed. Finally, one-time solutions have been minimized in
recognition of the already significant deficit projected for 2010-2011. None of the proposed strategies, however, has alleviated the need to impose significant reductions throughout nearly every City operation.
As we begin the eighth consecutive year of budget reductions, the City Council is now well aware of San Joses structural deficit and the challenge this presents to our long term fiscal outlook. With two-thirds of General Fund expenditures designated for personnel costs, the reductions proposed in this budget will mean fewer employees to provide the services our residents and businesses have come to expect. These significant reductions will include reduced police and fire services with cuts in both the sworn and non-sworn ranks; reduced library hours; reduced community centers; reduced parks services; along with reduced maintenance of many City facilities and our transportation infrastructure.

Los Angeles County could lose the use of up to $500 million for the next fiscal year, Mr. Knabe said. That would add to the county's projected $300 million shortfall in its $23.5 billion budget, of which supervisors can control $3.5 billion. That could mean cuts to services like parks and libraries.

The state could borrow about $25.6 million from Contra Costa County, said Contra Costa administrator David Twa. He says the county is in no shape to cut back more after slashing $156 million from its budget and laying off 600 workers.

San Francisco would be forced to lend the state up to $90 million under the governor's proposal, said city Controller Ben Rosenfield. With the city already facing a $438 million budget gap, officials would likely borrow funds if the state takes their property-tax revenue, he said. "It costs us money to borrow," Mr. Rosenfield said. "It'll end up falling on future fiscal years."

Administrators in smaller counties also oppose the governor's idea. The budget deficit of Kern County, in the Central Valley, could increase by $26 million if the state goes through with its plan, said Allan Krauter, Kern's legislative analyst. "We're going to have more layoffs with this," he said.

By JESSE McKINLEY
Published: July 21, 2009
SAN FRANCISCO " As lawmakers in Sacramento worked out the details of California’s long-delayed budget, local officials across the state Tuesday loudly criticized a deal that leans heavily on counties and cities to fill a $26 billion gap, with some vowing to fight the move in court immediately. The Los Angeles County Board of Supervisors voted to sue the state to stop it from withholding billions of dollars in highway taxes and redevelopment money, a maneuver others called the legislative equivalent of a holdup. “They’re stealing $1 billion in local government gas taxes,“ said Paul McIntosh, the executive director of the California State Association of Counties, a nonprofit lobbying group. “They don’t have the legal authority to take those revenues. I think that’s the definition of stealing, isn’t it?“

California finally approved the budget, but they're still playing games without actually cutting costs; they're shifting cost by borrowing from city and county budgets, and transferring some expenses into next fiscal year.