The State legislators and the Governor balanced the State Budget recently. You may remember that in February of this year the state adopted an 18-month budget. Since February the state accumulated a $26 billion deficit.
On July 28, 2009 the Governor signed a 27-bill package of budget solutions including:
Spending Cuts: $16.1 BILLION:
$820 Million in pay cuts to state employees or a 15% pay cut for 200,000 workers;
$9.3 Billion in education cuts;
$3 Billion in health and human services cuts;
$2.97 Billion in corrections, state parks and elimination/consolidation of state boards
Fund Shifts: $1.0 Billion
Revenues: $3.5 Billion
Borrowing: $2.2 Billion-$1.935 BILLION is the 8% local property tax grab
Other: $1.4 Billion - Payroll shift and health premium delays for state workers
How does the state budget affect the Town's budget?
The Prop 1A property tax grab amounts to about $250,000 in lost revenue to our Town budget. The state must pay this back in three years with interest. In the meantime the Town is short the $250K and must borrow this amount from its own reserves to balance the budget.
In addition to the state borrowing our property tax for three years, the Town's Measure F, a special municipal services tax is up for renewal on November 3rd of this year. Measure F represents $465,000 per year to the Town. The two attachments below summarize how Measure F has been spent over the last four plus years by the Town and provides other information relating to the town budget and Measure F.
If Measure F is not renewed by June 2010 the Town will be short $715,000 by this time next year.
Balancing next year's Town Budget will be a major challenge.