State Budget – Coming to a theater near you.

Doug McNea
Vice President
Silicon Valley Taxpayers Association

The recent local government compromise budget struck in Sacramento can not be given the title of "The Terminator." A better title would be the "The Good, The Bad, and The Ugly." This budget does not terminate the government credit cards. This budget condones complex, creative financing schemes with no rationale. The Good: local government protection from state imposed unfunded mandates. The Bad: locking in place with a constitutional amendment the current flawed state-local fiscal structure. The Ugly: the complex tax swap of vehicle license fees (VLF) and property tax revenues. This should be the last of the "Titanic" state budgets that rearranges deck chairs instead of steering clear of the iceberg. The taxpayers of California deserve better.

This latest budget remake of "Nightmare on Elm Street" was produced by an alliance of local government interest such as the League of California Cities, the California Redevelopment Association, and the California State Association of Counties. This local government coalition made up of mayors, county supervisors, and appointed city officials have accomplished something extraordinary. They have converted public tax dollars into their own private assets to build a political organization to sway the Governor, the Legislature, and the voters to their point of view. The effort led by the League of California Cities qualified Proposition 65 for the November ballot. The league donated more than $1 million toward the cause. The league’s employees are paid with tax dollars contributed by the member cities. The coalition then lobbied hard using Prop. 65 for leverage. In exchange for allowing the state to divert $2.6 billion over two years to balance the budget, local government gets to place its "King Kong" feet into the wet constitutional concrete.

If the taxpayers of this state only knew how their taxes are being allocated they would demand real reform. Local government is funded by three major sources of revenue: property tax, sales tax and the VLF. To understand how each of the revenue pies is sliced and allocated to redevelopment, education, cities, counties, and special districts is "Mission Impossible." The formulas for distribution can be found in the state code if you know how to decipher the code. Each year as part of the budget process this code is revised and compromised. This year’s budget compromise is contained in SCA 4 (Proposition 1A) and SB 1096. Your mission, if you choose to accept it, is to read and understand this legislation. This message will self-destruct in 30 seconds. Unfortunately, so could your tax dollars.