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State Looks to Cities for Billions

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Gov. Schwarzenegger has announced further details and cuts as part of his post-initiative failure plans for easing California's troubled fiscal situation--but L.A. Mayor Villaraigosa doesn't want to see the state balancing its budget on the backs of California's cities.

Schwarzenegger's latest proposal includes a new $5 billion in proposed cuts on top of $16 billion announced last week, and a likely additional $3 billion in cuts to come later in the week.

Part of his plan to solve Sacramento's problems, though, involve borrowing billions from the property tax revenues of cities and localities. And L.A. Mayor Villaraigosa, along with other local leaders, went to Sacramento to protest. As the Daily News reports:

Organized by Mayor Antonio Villaraigosa, officials from San Diego, Sacramento and Santa Ana met with state Treasurer Bill Lockyer, Controller John Chiang and legislative leaders, offering to work with them to solve the state's $21 billion deficit without harming local government.

"The state often balances its budget on the backs of cities, counties and school districts," Villaraigosa said at a news conference that was aired for Los Angeles reporters.

And as reported in the L.A. Times,

Villaraigosa, along with the mayors of Santa Ana, San Diego and Sacramento, said he was skeptical that if state officials raided their coffers, money would be available to repay them -- with interest -- within three years, as the state Constitution requires.

The League of California Cities and others have formed a coalition to fight state reliance on local money to get out of the fiscal hole, called "Save Your City," complaining that city services, and its citizens, will suffer unduly if Schwarzennegger gets his way on this. From a League of California Cities press release:

Across the state, many cities are enacting drastic cuts to their budgets including public safety reductions, employee layoffs, hiring freezes, project delays, program reductions and more.
More than 40 cities have passed or are scheduled to pass a resolution declaring a state of severe fiscal hardship by Tuesday, June 2.

Meanwhile, local blogger and former Daily News editor Ron Kaye is complaining that L.A.'s own latest budget proposals are similarly loaded with unsustainable gimmicks:

Just like that in 26 seconds without further adieu or debate, the City Council last week grabbed another $27 million out of the money we pay for electricity and put it into the treasury to help mask years of reckless spending.

Today, the council will put its final seal of approval on a budget that is a work of fiction. It won't even stand up 26 seconds into the new fiscal year starting July 1.

When it comes to government spending, from City Hall to the state capitol, things are tough all over.

(Photo by Mandel Ngan/AFP/Getty Images)