City reacts to state ‘raid’ with new budget

ENCINITAS — Despite an objection from one speaker and a council person, City Council approved a two-year budget May 20 that will take effect July 1.
The two-year operating budget was updated based on state projections of a $21.3 billion deficit.
Finance Director Jennifer Smith presented revisions to the city’s two-year operating budget and six-year financial plan in light of the failed state propositions on the May 19 ballot that were designed to close the state’s budget deficit.
Suspending Proposition 1A, which protects local property taxes, amounts to a “raid on local government funds,” Smith said. The staff said it estimates the state will take 8 percent of each city’s property tax revenues. The impact amounts to approximately $2.8 million in the city.
The governor must first declare a severe financial hardship with approval from the state Legislature in order to take funds from municipalities.
City revenues were adjusted from $50.5 million to $50.3 million in fiscal year 2009. General fund expenditures were decreased to $46.6 million for fiscal year 2009.
Kevin Cummings, a local activist, said that the proposal was incomplete. He urged the council to wait on taking any action until more details on economic assumptions were provided by staff.
Cummings said information about the construction of two new fire stations was missing. Operating expenses were taken out of the six-year plan for the Hall Property Park. “Does that mean that you aren’t planning to open the park for six years?” he asked.
“I think you should bring this back at a future meeting,” Cummings said.
Deputy Mayor Dan Dalager disagreed. “I’m done talkin’,” he said.
Councilman Jim Bond said the staff and council has been working on the budget for six months. “I think this is a good budget,” he said. He cited the double-A-plus bond rating by Standard & Poor’s rating agency as evidence of the fiscal soundness of the budget.
Councilwoman Teresa Barth said the budget painted a “rosy scenario” in a devastated economy. She also chided the staff for numerous missing pages in the budget. Some were left blank. She said the amount of public discussion made her uncomfortable in voting for the plan as it was presented.
“We have the time to have at least another meeting on this,” Barth said.
The vote was 4-1, with Barth opposing the measure.


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