GILROY
– Tuesday’s election results are sitting well with Gov. Arnold
Schwarzenegger, but the same cannot be said for certain more local
leaders.
GILROY – Tuesday’s election results are sitting well with Gov. Arnold Schwarzenegger, but the same cannot be said for certain more local leaders.
The county library system, which already faces a 10 percent budget cut, will get an additional 21 percent cut in funding since Measure B failed to land support from two-thirds of voters. Meanwhile, the City of Gilroy stands to lose $250,000 and could face cash flow problems because voters approved Schwarzenegger’s plan to pay off “economic recovery bonds” with city sales tax revenues.
The state will use property tax revenue to reimburse cities. However, those payments will come six months after the sales tax money is borrowed, interrupting the normal cash flow and causing cities to lose revenue from interest.
“The bond passing is not in the best interest of the city in the short term, but having said that, it’s probably the best thing for everybody in the long term,” Gilroy City Administrator Jay Baksa said. “This is a great time to refinance, and now the state is no longer under an enormous pressure that could have caused some draconian changes.”
Tough but not-so-draconian cuts proposed in the 2004-05 state budget have already been taken into consideration locally, Baksa said.
In addition to the property and sales tax flips, cities could lose out on a portion of car tax revenue the state had promised. Cities could also see their portion of property tax revenue reduced by nearly one-third.
“All of that has been taken into account in the preliminary budget I presented to Council about a week ago,” Baksa said. “The next step is for the state budget to get under control. Hopefully that will not be the other shoe to fall on us.”
Gilroy has not challenged the legality of the state’s various approaches to solving the budget crunch. However, Baksa said the city is waiting to follow the lead of the California League of Cities, which wanted to wait until after Tuesday’s election to determine whether cities should file a class-action suit.
According to city estimates, Gilroy has lost $16 million in revenue to the state since the early ’90s.
Council directed City Attorney Linda Callon to research case law to determine if the city would have any right to, essentially, withhold tax revenue from the state. But Baksa is not getting his hopes up.
“I don’t know how fruitful that will be,” Baksa said. “If the case law was there, another city probably would have brought it up by now. But we’ll see.”
It’s hard to spin Tuesday positively for Santa Clara County head librarian Melinda Cervantes. Her 10-city library system could be reduced by 31 percent in fiscal year 2005-06.
The initiative to continue a 10-year-old parcel tax failed even though it won nearly 61 percent of the popular vote. Parcel tax measures, with the exception of school bond measures, still require a two-thirds super-majority approval.
In Gilroy, the loss means – at the very least – a reduction in hours from 54 a week to 30.
“There will be layoffs. Books and materials budgets will be reduced,” Cervantes said. “This is a library system that has been through this before. We’ll have to go through it again.”
Cervantes said the county’s library board of directors will meet March 25 to discuss the impact of losing Measure B.
Beyond the imminent budget cuts, directors will consider at that session approaching voters again. The November 2005 ballot is the earliest they could put another measure on the ballot.
Directors may also consider a ballot initiative that treats libraries like schools. For school bonds, a super-majority of only 55 percent approval is required for passage. Some library supporters feel the institutions should be treated the same.
“I think we’re definitely going to look at it,” said Gilroy Head Librarian Lani Yoshimura. “I know there are other states in the U.S. that have a 55 percent requirement. It sure would make a big difference.”
