Editorial: A reprieve for cities, counties -- but just wait

(December 24, 2003)

Governor's decision to reimburse lost car-tax funds is a welcome respite, but just postpones the devastating local impacts of funding cuts

A collective sigh of relief went through the ranks of officials in Midpeninsula cities last week when Gov. Arnold Schwarzenegger announced he would not leave them holding the bag for his repeal of the state's vehicle license fee -- the notorious "car-tax" of his campaign commercial.

Schwarzenegger Thursday declared a "financial emergency" and said he would restore nearly $2.7 billion to cities and counties without legislative approval.

But the action-governor's action is nothing more than a short-term respite. The sense is still strong that California is spinning out of control and that local communities, nonprofit organizations and school districts will be caught up in the wreckage. San Mateo and Santa Clara counties both face major budget cuts, many of which will slash local services, directly or through community organizations that receive government funding.

After figuratively dropping his wrecking ball on the car tax as his first act as governor, Schwarzenegger initially said it was up to the state Legislature to find a way to fill in the funding gap left for local communities. We're glad he thought better of shunting of responsibility for his actions and just didn't leave the wreckage lying there.

Palo Alto officials estimated the local loss at $2.6 million per year that it would have received from a restored vehicle license fee. Neighboring cities and the two counties would have lost millions more, and the cuts would have hit in many services, including potential police and fire cutbacks.

In Palo Alto alone, the loss would equate to 22 officers or firefighters -- but that appeared to be largely theoretical and rhetorical, as the city has built up reserve funds and would almost certainly have found other items to cut. Moreover, Palo Alto had never budgeted for the increased vehicle license tax funds -- a wise precaution but one that undermined last week's warnings and expressions of outrage by local officials.

Schwarzenegger's newest move will actually come as a minor boon to Palo Alto, easing its budget challenges a bit in the new year.

Our biggest concern is the impact of the state's fiscal emergency on the hundreds of local nonprofit organizations, many of which depend on government funding for part -- in some cases a very large part -- of their annual budgets.

These groups simply do not have the reserves or the resources to juggle books around. When they run short of money, they cut services. When they can't cut any deeper and still have any services left, they go out of business.

This is not just a matter of words and numbers. This crisis is one of real people -- the thousands of local residents who rely upon nonprofit organizations and government agencies for services that they need, often desperately.

The crisis will come back to haunt local school districts and county departments of education -- further eroding the state's investment in its future generations' ability to compete in the world market.

In communities throughout California, citizens and officials are mobilizing to protect their local funds and programs. But many of these efforts will be futile in the face of the reality of the state's horrible economic imbalance, the effects of which will surely be felt for many years to come.

As the Weekly reported last week, the effects will be felt by people like a mother with triplets who are cared for by the MayView Health Center in Palo Alto, which cares for people with no health insurance. This will be a difference, literally, between health and illness, and in some cases life and death.

The Avenidas senior programs will be affected, along with an expected loss of $50,000 by the La Comida low-cost lunch program for seniors.

It is not reasonable to expect that the state's divided politicians will be able to move beyond their ideologies to bring some hope to citizens and communities.

But one could hope -- and demand -- that there be a full awareness of the impacts of the cuts before our new governor and the Legislature simply slash away by percentages.

State Treasurer Phil Angelides, despite being a possible future Democratic contender for governor, was on the right track last week when he called for a comprehensive plan leading to a balanced budget, as opposed to high-profile single acts. That should be a bipartisan necessity. ay

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