On Dec. 18, the Total Recall star came through on his promise, evoking emergency powers to return the lost funds to California cities, including more than $7 million to Sunnyvale.

But the money has not reached Sunnyvale yet, and Finance Director Mary Bradley said that the Democrats in the state legislature are waiting until the state budget is revealed on Jan. 10 to take any action on the appropriation. According to Bradley, the legality of the emergency powers has been called into question, again putting the repayments in question.

Unless deemed illegal, the payments will provide up to about $7.5 million in revenue to the city of Sunnyvale, which will help the city avoid further cuts to budget, services and employees.

Vehicle license fees are paid yearly and are based on a percentage of a vehicle's worth. Originally, the fee was 2 percent of a car's value, but since 1998, it has been reduced to .65 percent. To make up for the loss in revenue to individual cities, the state government has backfilled the lost funds.

Bradley said it worked out to the state paying two-thirds of the full amount to the city, because the VLF had been reduced to almost one-third its original amount.

She pointed out that the payments are important to city governments because they are generated locally and are predictable, which helps in the budgeting process. But because the state now handles the collection and distribution of those fees, the process has slowed.

"Cities are best left alone, using their own revenues to fund local services," Bradley said. "Any of our revenues that the Legislature touches are always subject to some reallocation."

In June, then-Gov. Gray Davis reinstated the full fee, which was projected to bring almost $4 billion into California's cities.

But after Schwarzenegger took office, the fee increase was eliminated and became a $4 billion deficit from city budgets.

Bradley said that on Dec. 18—when she presented to the council what was then going to be a deficit of more than $7 million—the local government began holding its collective breath, in hope of state relief and fear of further cuts.

Last month, the city began feeling the full effect of the cuts, after the state missed its first VLF backfill payment of around $450,000. At the time, Mayor John Howe said that while the payment itself was a fairly small fraction of Sunnyvale's budget, the city would not be able to handle losing that much every month.

"There's just no way that our budget can take a $450,000 hit every month without restructuring," Howe said.

If emergency measures had not been taken, Bradley said that restructuring could have included cuts to public safety and library services.

One criticism levied at Schwarzenegger is that his cuts—to replace the money lost when he cut the VLF increase—are going to hit state-sponsored programs that help the poor and disabled. Bradley said that many of Sunnyvale's programs are not state-supported, so the city won't be taking from one area to give to another.

"The thing that is really satisfying is that the governor made a promise that when he repaid the vehicle tax, he would not do it on the backs of cities, and he has kept his promise," Bradley said.