Good news? From Sacramento?
No, in this case that’s not a self-contradictory oxymoron. The state really is going to make good on the millions of dollars in property tax revenues it is taking from California counties and cities to balance its 2009-10 budget.
Proceeds from bonds to be sold, under the plan, will come to local government at exactly the same time the state siphons off the property tax revenue. So, at least in theory, we won’t feel the pinch.
And the state will be totally responsible for bond repayment, leaving counties, cities and special districts without risk.
At stake in Tuolumne County is $1.9 million. In Calaveras County, it’s $1.5 million.
So it is no surprise that boards of supervisors from both counties have joined the overwhelming majority of their counterparts statewide in signing up for the quick payment program.
“It’s a basic no-brainer,” said Tuolumne County Supervisor Dick Pland in joining a unanimous board vote for approval. “This is the best way to go,” agreed Auditor-Controller Debi Russell.
Throughout California, the amount to be expropriated from local government property taxes by the state — about 8 percent of the total collected — is more than $2 billion.
So, yes, bad news came before the good: The ill-tidings date back to 2004, when the state was amid an earlier financial crisis and rookie Gov. Arnold Schwarzenegger put a series of propositions before voters to both save California from bankruptcy and reassure local government that its every last dime wouldn’t be stolen.
Prop. 1-A guaranteed that local property and sales tax revenues be free from state raids — unless the governor declared a fiscal emergency and two-thirds of the Legislature approved the raid. Which happened this year.
Law provided that the forced “loans” must be paid back with interest by 2013. That’s four years, prompting much protest and threatened lawsuits from the lootees.
But last month the Legislature came to the rescue. It passed a bill providing that bonds backed by the state’s promise to pay back local governments be issued and sold by a consortium of cities and counties known as California Communities.
Although the bonds might stretch the state’s already thin credit, the program is a winning and well-deserved proposition for local governments. The raids, through no fault of the looted, could have put already-hurting cities and counties into even rougher straits. The bond program will stop that from happening.
The State Senate, which passed the bill unanimously (you heard that right: unanimously) saw the wisdom in it. So have more than 1,300 counties, cities and special districts which have signed up so far.
The administration and Legislature, in bringing our state to the brink of financial ruin, have certainly made their share of mistakes — both in terms of profligate spending and confiscatory “remedies.” A just-implemented state move to withhold 10 percent more from workers’ paychecks — which amounts to a forced, interest-free loan that will net the treasury $1.7 billion — is a good and timely example.
But in adopting the bond repayment program, the state for once did right by local government, and should be commended for it.