City officials discuss budget woes with Schwarzenegger

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During a roundtable discussion today in Culver City, officials from smaller cities in the Southland told Governor Arnold Schwarzenegger about their budget woes... and about their hopes that the state won't add to them. KPCC's Brian Watt was there.

Brian Watt: The economy has been tough on cities like South Gate. City Councilman Bill DeWitt says plant closings and rising unemployment are pushing down tax revenues.

DeWitt: You know, if we can put a toll gate outside the city and get an additional 10 cents for everybody coming in, that would be one thing. But that's not gonna happen.

Watt: What has happened is that South Gate has asked its 350 employees to take a 10 percent pay cut. Other cities are making similar sacrifices and selling some of their assets. Their officials want the state government to make the same tough choices.

There's talk in Sacramento about the state having to borrow tax revenues from the cities to balance its budget. Bill DeWitt says that would take about a million dollars from South Gate and push its budget over a cliff.

DeWitt: There would be major cuts in all levels of service, whether in our parks, public safety – and that's gonna be a real difficult thing for us to absorb.

Governor Arnold Schwarzenegger: I will fight [with] everything that I have in me to push back the legislators so they don't take money from local government.

Watt: Governor Arnold Schwarzenegger says that after five years of working on state budgets, he knows the legislature will go after local money first.

Schwarzenegger: It's because the local governments have a rainy day fund, and our state has refused to vote for a rainy day fund.

Watt: If that sounds like a plug for Proposition 1A and the other budget measures on the May 19 ballot, it is. Governor Schwarzenegger urged the small city officials to tell their constituents how tough the state's outlook will be if those measures don't pass. He acknowledged that the state could eventually be forced to borrow from the cities – like Whittier, where Owen Newcomer serves on the city council.

Owen Newcomer: That's like asking us to lend money to a sub-prime borrower. The state's credit rating is crap!

Watt: Newcomer says Whittier has negotiated 2 percent pay cuts with its police force, frozen positions left vacant by retirement, raised fees, and cut back on park and youth programs. He asks why California should punish Whittier for managing its funds better than the state.