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Jul 30th
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Sharing the Pain

news_treesWhere the state budget touches local government
Jerry Brown wasted no time making some big impressions as the new governor. His budget proposal for fiscal year 2011-2012 includes $12.5 in cuts and a shift in responsibility for some services to local governments. Here’s a quick run-through of ways the governor’s budget proposal would impact the city and county of Santa Cruz.

Redevelopment
Gov. Brown’s budget proposes eliminating funding for the state’s 400 or so redevelopment agencies—the thought of which has been a particularly hard pill to swallow for local officials. “Our Redevelopment Agency has allowed us to rebuild downtown, beautify the eastside, build workforce housing, attract companies and create jobs, and improve infrastructure,” says Santa Cruz Mayor Ryan Coonerty. “There is a tremendous return on investment for the city and the state. It is a short-term savings with a huge long-term cost.”

Santa Cruz Redevelopment Director Bonnie Lipscomb says, “The proposed budget is devastating to us at the local level.” Of the $12 million received by the RDA annually, Lipscomb says 35 percent is passed on to local schools and 20 percent to affordable housing. “Of the remaining 45 percent, 15 percent is spent on outstanding indebtedness and only 30 percent is available for ongoing projects and programs, economic development and business attraction and retention,” she says. “The governor’s budget message implies that local governments and taxing entities are not receiving the benefits of redevelopment reinvestment at the local level and [that really] couldn’t be further from the truth.”

Realignment
Brown’s budget proposes eliminating RDA funding in order to “realign” those funds to local governments, to be spent on services including public safety, child welfare and mental health. Additionally, it proposes shifting responsibility for low-level criminals and parole violators from state prisons to county jails.

Assemblymember Bill Monning (D-27th District) says this realignment will mean more control at the local level. “There’s been this division, with local government feeling the state is depriving them of local resources,” he says. “This is the governor’s effort to say we’re going to do realignment—you want control of the money, you get it but then you provide the services.”

“It doesn’t mean redevelopment wasn’t a good idea,” he adds. “It created jobs, did away with blight, helped businesses. He’s saying local government should have access to that money, and give them more control in prioritizing services at a local level.”

But in the eyes of others, like Santa Cruz City Manager Martin Bernal, this realignment is more a shift of burden than a shift of power. “From the city’s perspective, the idea that ‘realignment’ will give more power to local government is a misnomer,” says Bernal. “If the governor’s proposal were to be adopted, the city would see a significant loss of revenue that is currently invested in infrastructure and economic development [redevelopment funds]. I don’t see how this is giving us more power. It would give us fewer resources to invest for these purposes at a time that we need to be making those investments.”

Saved By the Bell
Local K-12 public schools are expected to sit out this round of state-mandated cuts—sort of. Recognizing the hard hits K-12 education has taken in the past several years of budget balancing, Gov. Brown’s proposal protects it from big cuts (taking $200 million overall). Higher education didn’t fare so well (see “UC: University of Cuts” on page 6).

Outside Lands
Brown is proposing $11 million in cuts to state parks. "These latest cuts are devastating on a statewide basis,” says Bonny Hawley, executive director of Friends of Santa Cruz State Parks. “But if there is a bright spot, it's here in Santa Cruz County where people love their state parks and they have been willing to dig deep to show it. With our community's continued support, we will re-double our efforts to be creative and innovative in order to protect the legacy our parks represent."

Bigger Picture
Everyone agrees the state’s fiscal situation is dismal and the budget cuts are historic. But, beyond that, opinions vary on whether this new budget is more of the same from Sacramento or a new, strict approach to setting the Golden State back on track.

“I appreciate that Gov. Brown is finally having the long overdue conversation with the citizens of California about how bad the state's fiscal situation is and that we don't have the governance structure in place to fix it,” says Coonerty, but he adds that the city remains skeptical until the things pan out.

Monning urges his constituents to have faith in the new governor and his plan. “We have to bite the bullet—everyone has to share the pain now if we want to evolve in the next three to five years to a robust economy,” says Monning. “It’s certainly nothing to celebrate, [but] the cause for hope for our state is that we have a governor who is putting the cards on the table.”

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