City to Lose Revenue With Repeal of License Fee Increase (Berkeley)

dailycal.org ^

[chance33_98]

City to Lose Revenue With Repeal of License Fee Increase

By ALICIA WITTMEYER Daily Cal Staff Writer Wednesday, November 19, 2003

The city of Berkeley’s bleak budget situation took a turn for the worst Monday, when, as his first move in office, Gov. Arnold Schwarzenegger repealed the tripling of the vehicle license fee. The repeal, on top of the growing possibility that Berkeley voters will reject a $10 million parcel tax increase, could mean service cuts and the first city layoffs in at least 13 years. “There won’t be any service in the city that won’t be impacted in the near future to try and balance the city’s budget. We have some hard decisions to make,” said Acting City Manager Phil Kamlarz.

The repeal, which comes as the city struggles to fill an approximately $11.2 million budget gap, will cost the city up to $6 million in state revenue, said City Budget Manager Paul Navazio.

The city is looking at instituting a rotating closure of a fire station, closing a fire engine company, cutting 35 police officers, reducing hours at city facilities such as senior centers, and putting all development projects, such as sidewalk and parks improvements, on hold, Kamlarz said at last night’s City Council meeting.

Although city officials had been anticipating the repeal of the vehicle license fee increase since Schwarzenegger was elected governor on Oct. 7, the details of repeal’s impact on the city are still murky.

When Schwarzenegger repealed the increase, he promised cities and counties compensation for the combined $4 billion they would lose. The fee helps local governments pay for police, fire and other services.

But the specifics of the compensation have yet to be worked out. Schwarzenegger has not made it clear whether the state would be compensating the cities for the money lost annually, or on a one-time basis, Navazio said.

Former Gov. Gray Davis ordered the fee increase to begin on Oct. 1, saying the state could not sustain payments to local governments without it. With the state facing a $14 billion deficit next year, city officials are anticipating that they will not see any of the compensation money.

“It’s easier to say that city and counties have to handle (the cuts),” Navazio said. “We’re not counting on it.”

As the city copes with losses from the vehicle license fee increase, city officials are also struggling with the growing possibility that a parcel tax increase, seen as one of the main solutions to Berkeley’s deficit, might not pass.

Although city officials collected survey data in August that suggested property owners would support the tax if it protected services, recently many neighborhood associations have come out against the tax, saying Berkeley taxes are too high.

If the tax does not pass, the city’s deficit could swell up to $15.4 million.

The parcel tax, which could raise $8 million to $10 million for the city, would raise an average Berkeley homeowner’s property taxes by $200-$250.

Berkeley’s property taxes are already among the highest in the Bay Area.

The mood at last night’s packed City Council meeting was grim and intense, as Berkeley property-owners railed against tax increases, while city employees demanded protection against layoffs. Council members discussed re-opening the city’s union contracts for renegotiation.

“If the voters decide they don’t want to support the tax measure we’ll have to do what we’ll have to do, which is make cuts, and we’ll have layoffs. There’s no two ways about it,” said Berkeley Mayor Tom Bates. “This is real, folks.”

[zeugma]

could mean service cuts and the first city layoffs in at least 13 years

I'm quite sure it is about damned time. I'm also quite sure that they'll be cutting fire/ambulance services first, and police too, except the revenue generators out there writing tickets to justify their existance.

[toomuchcoffee]

I'm sure that it will all work out. We'll have a vigil and burn candles. Sing a few songs and appeal to Mother Earth. It will be okay. Or maybe, we could watch our spending and stop the horriffic giveaway programs that are at the top of the spending list. Nah... Now, where did I put my candles?

[struwwelpeter]

Is this the city that spends so much time passing resolutons on international matters? Perhaps if they'd put this wasted energy into local affairs, they'd be better off today.

[Middle Man]

"The repeal, on top of the growing possibility that Berkeley voters will reject a $10 million parcel tax increase, could mean service cuts and the first city layoffs in at least 13 years."

Great! Let bureaucrats feel the cold steel shank of layoffs like everyone else has.

[Grampa Dave]

They will lay off cops and firemen and maybe the one non homosexual working in the library. Of course, this is the evil Arnold's fault.

If that happens, the criminals from Oakland will move in to loot and burn. Good Bye BeZerkley, and California will be a better place.

[Mr. Bird]

while city employees demanded protection against layoffs

Fire......them......all.

Not possible, I know. But a city manager with smarts (and not a political axe to grind) would publish a chart of possible layoff options. Show that 3 clerks would equal one police officer, or whatever the ratio is. Slash the dead weight. Constitutents would be happy (or at least less angry), and the budget situation gets better.

The truth of the matter is any government is loaded with unnecessary expenses. The challenge is finding them and eliminating them. The private sector does it every day.

[gulfcoast6]

Couldn't happen to a better bunch of politicians.

[o_zarkman44]

How can a city lose revenue it never had it's hands on in the first place? The practice of budgeting based upon inflated future revenue expectations is the downfall of governments everywhere. Whatever happened to living within their means like working class citizens? I would love to think I am getting a $10,000 bonus in the next month or 2. But I'm not going to spend money I don't have and know I have virtually no chance of recieving.

[goldstategop]

Arnold can let Berkeley go to hell in a handbasket. It will never vote for him along with the rest of the Bay Area. Come to think of it, its probably the best thing to happen to the socialist hardscrabble who live there. Let them get along with less for a change.

[jnarcus]

Ah these dooms dayers always say that "services" will be cut....now realistically how many city councils are going to stop police and fire services because they are not budget priorities? Of course in Berkeley that may be a stupid question

[telebob]

What bunk. How can you lose something you never had. California cities have not lost a dime from rescinding the triple fee car tax. Most cities do their budget cycle in 1 and 2 year increments. They know well ahead of time where shortfalls will appear and estimate accordingly.

The tripling of the tax only took effect for those registering or buying cars in October - November. The tax in no way could have any influence positive or negative on the current budget cycles.

As for laying off police and fire, frankly that's were the money is in a general fund. My Bay Area city went from having police/fire services costing out at @ 50% of general fund revenues 10 years ago to currently running 75 - 80%. And that includes the swelling of general fund money by about 35% in that period.

This same Bay area city is looking at a 14% pay increase for police and fire this year alone. Not to mention increased retirement benefit costs for public safety folks.

Whether you agree or disagree about whether these folks deserve this big a slice of the pie, those cost are what's burying the cities now. The guy fixing potholes or trimming the trees is not the problem.