California's long budget negotiations came to a close as the state Senate and Assembly passed a package of bills Friday designed to address about a $25 billion deficit in the 2009-2010 budget.
At first glance, it appears that Pleasanton will have to transfer at least $6 million in local property taxers to the state, but may be spared sending another $1.2 million in gasoline sales taxes for the time being. The city relies on the gas tax for street maintenance and resurfacing.
The budget, which includes drastic cuts to education, health and welfare services, as well as substantial borrowing from local governments, has many Bay Area officials calling for a change to the budget process.
The cuts include $6.1 billion in cuts to K-14 education funds, $2 billion in higher education, $1.3 billion in Medi-Cal general fund reductions, and $1.7 billion from local redevelopment agencies.
The decision to order the transfer of monies from local redevelopment funds would have a significant impact on Livermore, which is using those funds to improve its downtown, finance the Bankhead Theater and initiate design work on a new performing arts center.
Pleasanton and Dublin do not have redevelopment agencies.
However, while the state Senate approved transferring gas tax revenues and an offshore oil drilling project near Santa Barbara early Friday morning, the Assembly rejected both those bills later in the afternoon.
The Assembly accounted for the lack of gas tax revenues by applying more than $900 million that had been set aside as a reserve fund by the Senate, according to Assemblyman Jerry Hill, D-San Mateo.
The budget will now go to the desk of Gov. Arnold Schwarzenegger for approval. Schwarzenegger said in a Twitter message this Friday afternoon that he plans to sign the budget deal into law next week.
Schwarzenegger released a statement after the Assembly approved the deal Friday.
"These are difficult economic times that demand courage from elected officials, including those in the Legislaturem" Schwarzenegger said. "Both Republicans and Democrats stepped up to the challenge. Our job is not over, and I will continue to work with the legislature to move California forward."
Hill said he was "happy that we balanced the budget," after marathon debates that started Thursday evening and lasted for about 20 hours before finishing Friday afternoon.
"It's not a happy budget, there's no question about it, with the tremendous cuts that have been made and how that'll affect the average resident of California," Hill said.
Hill said he was glad that the Assembly voted down the gas tax and oil drilling bills, and said that the only effect on local governments will be the borrowing of the redevelopment funds.
San Jose Mayor Chuck Reed said that San Jose "will undoubtedly fight over the redevelopment funds," and that the city stands to lose about $75 million that would go toward creating jobs and capital projects, including work on the city's convention center.
Reed is one of many Bay Area officials, including San Francisco Mayor Gavin Newsom, who said they support a constitutional convention that would overhaul the budget negotiation process.
The group leading the campaign to create a voter-authorized constitutional convention is the Bay Area Council, a collection of local business leaders.
John Grubb, a spokesman for the council, said the budget problems are part of "a systemic failure. There's no one individual to put the blame on."
The constitutional convention, as proposed by the group, would be limited to dealing with the budget, particularly the two-thirds majority required to pass budgets or raise taxes, as well as the budget initiative process, and issues of government oversight.
Grubb said "it's shameful that we continue to go through this exercise of fake budgeting, and putting off the tough decisions."
Friday's budget deal was a revision of the 2009-2010 budget, which was passed back in February to close a deficit of more than $40 billion.
Hill, who supports the calls for a constitutional convention, acknowledged that the deal approved Friday might only last for a few months because of low tax revenues coming into the state.
"I'm hoping it'll last at least through November but there's no telling," he said. "We're in the worst recession since the Great Depression, so we're really in uncharted territory."