CaliforniaCityNews.org

What Would Happen If Governor Schwarzenegger Left Office To Take A Job In DC?

Rumors and speculation are regular grist for the mill here in Sacramento - we usually discard them out of hand here at CCN - but there's one that continues to persist and has even started to make its way to mainstream television and newspaper media: Would Arnold Schwarzenegger leave California mired in the midst of economic turmoil to take a job in an Obama or McCain administration?

Open speculation around here has many tongues wagging. Governor Schwarzenegger would be a prize for either new President - giving a nod to Californians for McCain and an equally important nod to Republicans for Obama. And, as the politician in the country with perhaps the most significant environmental credibility, his international recognition and Hollywood fame, "Arnold" would be just what the doctor ordered for a President looking to heal relations here in the country and across the world.

From a city perspective, there has been no greater champion of local government than Schwarzenegger - the first Governor to actually mean what he says and hold the line against ERAF shifts and Prop 1A borrowing. Sure, he's not solid (note the RDA takeaways this budget year) but is there a chance we'd really get any better?

Lt Governor John Garamendi, already an announced candidate for Governor in 2010, isn't a known quantity to city folks. And, while we'd like to think the Lt. Governor would be as big a champion for cities as Arnold has - we just won't know until we know.

So, regardless of who wins Tuesday night - keep this nagging question alive in the back of your mind and until then read more about it in the Sacramento Bee

Cities Begin To Cut Police Budgets

You know the situation is really bad when cities begin to cut back on law enforcement services. Long the third rail of local government budgets, police and law enforcement services have been sacrosanct in the budget cutting process.

Not for long.

The cities of Stockton, Sacramento, and Vallejo have already begun the process. More will be likely as economic conditions grow worse.

Local governments in California, suffering from dramatic reductions in property tax as a result of the foreclosure crisis and dramatic drops in sales tax from the slowing economy are eyeing the once unspoken - cutting police budgets. And, its gaining national attention. More in the Wall Street Journal

Schwarzenegger: California faces fiscal 'state of emergency'

BREAKING NEWS....many of you will recall that the declaration of a state of emergency by the Governor was the trigger required to enact the borrowing provisions outlined under Proposition 1A....the states dire financial situation causes the Governor to declare that everyone will take a hit...

Gov. Arnold Schwarzenegger characterized the state's projected multibillion-dollar budget deficit Wednesday as a "state of emergency," reflecting money woes worldwide, and he warned that major public services will be affected.

"Since everyone has to take a haircut here, it's natural that education gets hit, law enforcement gets hit, prisons are going to get hit, and also health care is going to get hit," Schwarzenegger said. "So, it's just the math, it's not me, it's mathematics that tell you that you have to make cuts in those kind of different areas."

Schwarzenegger was responding to reporters' questions at a news conference featuring a handful of former legislators touting passage of Proposition 11, which would alter the state's process of drawing political districts. Story in Capitol Alert

Vallejo takes steps to help fill budget gap

Bet you thought we were done reporting on Vallejo right? Not so fast.

Vallejo is asking most city employees to take unpaid time off work to help close an unexpected $3 million budget gap.

City Manager Joe Tanner also volunteered to take a 10 percent pay cut off his $316,000 salary to help the ailing city, which filed for bankruptcy in May.

The City Council was expected to give preliminary approval of the cuts Tuesday night.

In other bankruptcy news, a federal appeals court agreed Monday to hear the police and fire unions' appeal of the city's bankruptcy filing, which was granted by the federal bankruptcy court Sept. 5 in a 52-page ruling.

Vallejo is the largest - and at the moment, only - city in California to file for bankruptcy.

But it may soon have company. Its neighbor in Solano County, Rio Vista, is also on the brink of financial ruin, facing a shortfall of about $1 million on its $7 million general fund.

Lets just hope Sacramento is paying attention to the fiscal condition of many cities out there. As cities teeter on the brink, any irresponsible borrowing or taking scheme from Sacramento politicians could be just the straw that breaks the camels back for many a municipality.

Full report in the San Francisco Chronicle

Sour economy makes California spending measures iffy - How will local revenue measures fare this November?

Noted columnist Dan Walters pens a piece suggesting the rotten economy could play havoc with state and local ballot measures. Dan Walters column here  Incidentally, there are a record number of local ballot measures facing voters in the state this November - mostly for schools.

While many local governments were advised to go for a revenue measure during this predicted high-turnout election, no one could conceieve that the economy would fall off a cliff in the month preceding the election.

So the success, or failure of local measures will come down to this...will the high turnout, comprised largely of lower propensity and younger voters be enough to offset voter angst and concern about the economy? While no one knows for sure - CCN will make one prediction - those local campaigns that changed their message during the late summer and started running against Sacramento's fiscal irresponsibility, the potential of state raids on their coffers, and the fact that all new revenue stays local and can't be used by politicians in the capitol - will be successful.

Those that didn't...good luck.

Governor Looks For A Sales Tax, Calls For A Special Session, and declares a "State of Emergency" - What Does All This Mean For Cities?

News stories mid-week broke reporting that Governor Schwarzenegger will call for a special session on Wednesday November 5th and followed up the next day with his decleration of a state of emergency. Gov. Arnold Schwarzenegger will push for a sales tax increase when he calls legislators back to Sacramento next month, California education leaders said Tuesday - and for cuts of more than $2 billion in school spending.

The leaders also said after a closed-door meeting with the governor that he estimated the current size of the gap between state revenues and spending in the budget he signed only last month at between $5 billion and $8 billion, and "possibly more."

Other Capitol denizens have put the deficit at $10 billion.

Thats in the budget he signed last month folks - thats right, the smoke and mirrors have cleared and there's a huge gaping hole in the states finances. Rumors abound that the budget for next year could see a yawning gap of up to $20 billion in January.

So whats a Governor to do? Well, here's how CCN sees it....the Governor likely expects Republicans to lose a handful of seats in the elections next Tuesday. The gamble then becomes his ability to offer enough termed out GOP'ers and those that just lost election something juicy (like a job or pet project) to cajole them into voting for a tax increase. Incoming Republican freshman legislators will add pressure because they'd rather have their termed out colleagues take the fall in this budget than have to vote for it themselves next year...same may go for a vote on borrowing.

While there has been no specific administration or legislative talk of specifically borrowing from city coffers nor of more redevelopment raids, the rhetoric has risen to a new level with the declaration of a state of emergency. In fact, close observers will note that that's the precise language required to enact the borrowing provisions of Proposition 1A and 42 - as always you'll hear about it here first.

More coverage in The Sacramento Bee and The San Jose Mercury News  

Incidentally, there has been one suggestion of borrowing made by an education leader concerned about cuts to schools. Los Angeles Unified School District Supt. David L. Brewer said that Schwarzenegger's proposal would cost the district as much as $440 million. He called cuts of that magnitude "impossible."

"They're going to have to go out and borrow money because we'd go bankrupt," Brewer said. "Fiscally, we can't do that without literally having to shut down schools."

He clearly didn't mean borrowing from cities right? Story in the LA Times

LA Rooftops Going Solar?

The LA city council voted unanimously Tuesday to draft a solar rooftop measure for the March 3 ballot, "even though officials with the Department of Water and Power still don't know what the initiative would do to electrical rates," says the LA Times.

There's a tight turnaround for the council to decide whether the initiative (once drafted) should go on the ballot, with the Times reporting Nov 7 as the drop-dead date for action.  That's next Friday, for those you following at home.  Read more in the Times here.

PI Madaffer

San Diego Councilman and League of Cities Past President Jim Madaffer has been moonlighting as a private eye lately.  That's right, after his car was broken into and his laptop stolen, COuncilman Madaffer began corresponding with the thief (via his stolen cell phone) and was ultimately able to involve police in a "sting" that netted not only his stolen merchandise, but the thief himself.

Read all about it in the San Diego Union Trib.

NLC Conference to Focus on Housing Solutions

The National League of Cities is gearing up for its annual Congress of Cities, set for November 11 - 15 in Orlando.  This year's event will feature a "mini plenary session" of prominent federal and local officials who will discuss new and innovative approaches to local housing challenges.  

The session will focus on new and existing federal programs, including the new $3.9 billion CDBG Neighborhood Stabilization Program, can jump-start or enhance local strategies to help neighborhoods and families affected by the housing crisis.  Visit the NLC website for more.

CalPERS Portfolio "Rocked"

As most folks are getting their third quarter investment statements, here's another for the pile: CalPers has lost 20% since July.  Oy.

Kinda says it all, but if details are your thing, check the LA Times.