The Campbell Reporter

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CAMPBELL COUNCIL MEMBERS DISCUSS STATE BUDGET WOES WITH STATE ASSEMBLYMAN JIM BEALL

Municipalities impacted by state's fiscal crises

By Cathy Weselby

Proposition 1A might protect cities from the state siphoning monies out of their general funds, but there is still a looming state deficit that will affect all municipalities including Campbell.

How badly they'll be affected was the question for a special study session on Jan. 2 with state Assemblyman Jim Beall and Campbell City Council members. Beall told the council that he's committed to protecting local funds, but painted a grim picture.

California is $1.9 billion in the red for fiscal year 2007-08. This deficit is being compounded by the mortgage crisis and lack of property taxes, which will bring the deficit to $10 billion, Beall said.

Beall represents the 24th Assembly District, which includes the cities of Campbell and Saratoga, parts of the cities of Santa Clara and San Jose, and a small part of the town of Los Gatos.

Beall's $10 billion deficit figure was optimistic. On Jan 10, Gov. Arnold Schwarzenegger released his proposed budget, with a $14 billion shortfall. The governor declared a fiscal emergency and state legislators will have 45 days to cut costs or increase taxes. The governor is moving toward program cuts.

Campbell City Councilwoman Jane Kennedy asked Beall point blank, "How much is the state going to take?"

Beall responded that Proposition 1A, passed by California voters in 2004, prevents the state legislature from tapping into local revenue. He added that the biggest hit to city budgets would be the reduction in property-tax revenue.

"We hurt, right along with the state," Campbell Mayor Don Burr said.

Beall said the mortgage crisis has lowered property taxes, and that, combined with lowered income and sales tax plus the unanticipated expenses triggered by the Southern California wildfires, have all contributed to the deficit.

"In dealing with deficits, you don't wait and you don't pray," he said.

He stated that budget cuts are eminent.

Councilman Joe Hernandez asked Beall how confident he was that budget could be balanced.

Beall responded that if legislators could reduce the deficit down to $3 billion or $4 billion, the state would be in good shape.

One of the areas the assemblyman said he would be looking at closely was the $18 billion in tax credits. Beall explained that these are last-minute proposals that are slipped in right before the budget is approved, and lawmakers don't often have adequate time to review the fine print.

"I vote against all of them," Beall said.

He said that tax credits require two-thirds majority approval for removal, but only a 51 percent majority for approval. Beall said he would like to see a two-thirds majority required for tax credit approval.