While the state budget stretches into a months-long impasse, one of the latest proposals to close an estimated $15 billion deficit is to dip into local gas-tax and property-tax revenues. If the proposal goes through, about $16.3 million could be at risk in San Luis Obispo County.
The idea is nothing new, but it comes at a time when budgets are already tight and many believed some local funds were off limits.
Proposition 1A, passed by voters in 2006, protects local shares of the state gas tax from being taken. Under the proposition, the state can draw from local revenues in tough economic times, but must pay it back with interest over three years. Gov. Arnold Schwarzenegger declared a state fiscal emergency in January, so the money is up for grabs this year.
The problem is that while the state is still trying to solve its own financial troubles, local governments that have already passed their budgets may now have to go back to the books.
In addition to holding an Aug. 6 press conference to draw attention to their concerns, city and county officials sent letters to the state warning of the potential damages.
According to the League of California Cities, the incorporated cities of SLO County stand to lose about $1.4 million in transportation funds provided by the gas tax. SLO County would lose about $3.4 million.
San Luis Obispo is in a tough spot because of a recent binding arbitration agreement with the local police officer’s union, said Assistant City Manager Shelly Stanwyck. “It’s a triple whammy for the City of San Luis Obispo,” she added.
The other whammy—property taxes—also stands to send local governments into a scramble to rebalance their budgets. The League of California Cities reported that incorporated SLO County cities would lose about $5.5 million and the county would lose about $6 million.