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Mayor: City may face more layoffs if state takes funds

Mayor Kevin Johnson is worried that the state’s plans to take local revenues could lead to more layoffs of city workers and slow major development projects. County government officials are also alarmed about the state’s plan, which could be approved by the Legislature on Thursday.

Legislative officials and Gov. Arnold Schwarzenegger are planning to use local funds to help balance the state’s $26.3 billion budget gap. The Legislature may take $1 billion in gas tax funds and $1.7 billion in redevelopment funds from local governments throughout the state. The state plan also includes borrowing $2 billion in revenues from local property taxes.

Earlier this month, the city laid off 135 workers and made severe cuts to programs to balance its budget for the 2009/2010 fiscal year.

Johnson told reporters Tuesday that he is participating in efforts to lobby against the state proposals. “I’m making phone calls, and we’re lobbying like crazy,” he said. “I don’t know if there’s anything we can do at the end of the day, but we as a city need to be prepared.”

If the Legislature approves the plan to take money from local governments, the city would likely have to lay off more of its employees, according to Johnson.

“I’m a little bit in denial,” Johnson said, referring to the prospect of more layoffs.

Sacramento would be able to part with local property tax funds because the city can borrow from its risk funds, Johnson said. However, the city is concerned about the possible impacts from the state taking redevelopment and gas tax funds, he noted. Johnson said major development projects in Sacramento, such as The Railyards, Township 9 and Curtis Park Village, could be affected if the city is compelled to give redevelopment funds to the state.

The county could also face hardships if the Legislature approves the plan as part of the state budget. County spokesman Zeke Holst said redevelopment projects would have to wait if the state takes local redevelopment funds. If the state borrows from the county’s property taxes, county social services programs will suffer, he said.

If county gas tax funds are tapped into by the state, road maintenance in the county would be delayed, he said.

*Photo by Cheyenne Cary

Kathleen Haley is a staff reporter for The Sacramento Press.
 

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