State cuts = local pain for Stanislaus County, cities

The proposed state budget slams local government harder than city and county leaders had anticipated, raiding local gas and property taxes and redevelopment accounts, they said Tuesday.

When Stanislaus County leaders adopted a preliminary budget in early June, they anticipated a hit of $20 million to $25 million. Exact numbers have yet to emerge, but indicators suggest that the state could take up to $30 million, said Rick Robinson, the county's chief executive officer.

"It seems like our worst fears have come to fruition," Robinson said. "This is the worst hit on local government I've seen in my 28 years (of government work), and at a time when local discretionary revenue is down at historic lows."

Gov. Schwarzenegger and legislative leaders agreed Monday night to close the $26.3 billion budget deficit by cutting broadly across state government, shifting costs into the future and capturing funds from cities and counties.

With two days before the deal goes before the full Legislature, lawmakers are beginning to feel the full weight of pressure from interest groups with an array of misgivings and grievances.

"Everybody affected comes out of the woodwork, and everybody's ox is gored in this budget," said Democratic strategist Steve Maviglio, who was a deputy chief of staff to former Assembly Speaker Fabian Núñez. "The sales job of leadership will be in convincing members that this is the best deal they can get."

That could be a hard task. The California State Association of Counties and the League of California Cities are threatening to sue the state over the $4 billion it's taking from local governments.

City calls budget a 'Ponzi scheme'

Modesto could lose about $6.5 million. City leaders scheduled a news conference today "to denounce this terrible budget and explain why (it) can only be described as nothing more than a Ponzi scheme," a city advisory reads.

"I'm very disappointed that the state would be so irresponsible," said Councilwoman Kristin Olsen, vice chairwoman of the City Council's finance committee. City officials laid off eight police officers to help close a $4.8 million budget gap.

The state's "extra helping" could cost some deputies their jobs, said Sheriff Adam Christianson, who reduced his department's budget by $7 million this spring without resorting to layoffs.

"I don't have anything else to give," Christianson said. "The only thing left is reductions in force. It's simply not fair, and (state leaders) shouldn't be able to do it."

Also facing the chopping block are about 25 of the 120 workers in the county's road crews, plus nine vacant positions. Officials recently realized that state leaders were eyeing the county's $8 million in gas taxes and up to $4.9 million in Proposition 42 transportation taxes.

"Road construction will pretty much come to a halt in this county," said Jim DeMartini, chairman of the Board of Supervisors. Road maintenance would be hit even worse, said public works director Matt Machado, who intends to bring layoff recommendations to the board Aug. 4.

"We're all upset," Machado said. "A lot of good, good people will lose their jobs. And the people who remain will have to carry that extra load, so there will be more work with less people — who have furloughs."

The latest news from Sacramento suggests an additional $1.5 million hit to drug court and other alternatives to incarceration for drug offenses. Drug abuse and mental health programs were ravaged by previous cuts and likely will be again.

The county might lose $9.6 million more if state leaders decide to withhold money owed to counties for programs mandated by Sacramento. And rumors persist about a raid on redevelopment money, perhaps costing the county $2.23 million. One scenario has the state suing itself as soon as the budget is signed, just to see if that money grab is legal.

"That's how convoluted and confusing the whole process is," Robinson said.

"It appears to be the same old shell game of shifting money around, borrowing and deferring payments," DeMartini said. "What they (state legislators) need to do is cut expenses. That's what we do here."

The county also expects deep slashes to job training, health care for needy children and in-home support services, although exact numbers aren't known.

The county has eliminated 454 jobs since the recession began. Leaders plan to draw $24 million from reserves to balance the next three yearly budgets.

Although education advisers and lobbyists are advising districts to wait until the budget deal is voted on by legislators Thursday, Stanislaus County educators said Tuesday the agreement's K-12 education spending plan is similar to Schwarzenegger's May Revise spending plan on which most districts based their 2009-10 budgets.

Schools say they're prepared

"It's not good for us, but if it's similar to the May Revise, that's what we built our budget on," said Bob Price, superintendent of the 3,000-student Empire Union School District. "We're relying heavily on the (federal) stimulus money."

Yosemite Community College District Chancellor Roe Darnell said his district most likely trimmed enough by cutting $8 million for its 2009-10 budget before the state budget deal was struck this week. That means fewer classes for more students because a larger number of people are seeking job training or considering community colleges before transferring to a university because the four-year campuses are raising fees and decreasing enrollment.

The YCCD is the parent district of Modesto Junior College and Columbia College. Student fees most likely would increase from $20 to $26 a unit, Darnell said.

"(Monday's deal) is the best thing they could have come up with, with all the circumstances they had to wrestle with," Darnell said.

The budget deal includes borrowing against future years, which doesn't solve the budget crisis, county educators said Tuesday.

"It might work in the short term, but eventually it's going to come home to roost," Price said, which makes the budgets for the next two years "very scary."

Bee staff writer Garth Stapley can be reached at or 578-2390.

Bee staff writer Michelle Hatfield and the Contra Costa Times contributed to this report.

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