Friday, January 9, 2009

Another state budget casualty

Local schools aren't the only ones being hurt by the state's budget bickering.

Since the state decided to plunder the redevelopment agency fund — in apparent violation of the California Constitution, and a lawsuit is pending — countless projects across the state have been put on hold.

Tracy's redevelopment agency, according to city finance director Zane Johnston, cannot take out new bonds to help fund improvement projects in the Bow Tie area, like the Sixth Street Plaza, until the budget mess is sorted out.

“We don’t know how much money we can really count on having," he told me Thursday.

Other local redevelopment agencies that have already taken out bond funding are dealing with a revenue loss.

But at least the city is mostly insulated from the state's budget crisis, Johnston said.

“For the most part, I think we’re probably 95 percent shored up on the city’s general fund from the state impacting us.”

Of course, there could be exceptions.

One is that the state declares a fiscal emergency and decides to borrow property taxes from local governments with the promise to pay back the pilfered money within three years. The other is that local payments routed through the state, such as sales tax revenue, could be given to local governments in the form of IOUs if a budget isn't in place by February. (And remember, IOUs aren't really good for paying workers or buying supplies.)

Let's hope neither of those exceptions come to pass.

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