City to lose $15 million

Paul Clinton

Gov. Gray Davis’ budget balancing act sent Surf City leaders

reeling this week, after they calculated that his most recent plan

would drain $15 million from the city’s coffers over the next 18

months.

The governor on Friday announced a double-hit budget package of

cuts and $8.3 billion in tax increases to right the budget. The state

is $35 billion in the red.

Huntington Beach will need to cut $10 million from its budget,

Mayor Connie Boardman said.

“To save $10 million, I can’t imagine we’re not going to have to

cut programs that are popular,” Boardman said. “Things will change.”

Of the $15 million in cuts, $9 million comes from revenue the city

receives from vehicle registrations. Davis is also proposing

eliminating much of the funding redevelopment agencies receive.

The city’s Redevelopment Agency could lose as much as $6 million

in funding to develop affordable housing, pay off debt and perform

other improvements, City Administrator Ray Silver said.

The cuts could cripple a number of agency projects, including The

Strand and Pacific City -- two projects that would bring a mix of

housing and retail to Downtown areas -- as well as the revitalization

of the Huntington Center shopping mall, Silver said.

Economic Development Director David Biggs expects the

Redevelopment Agency will lose between $3 million and $4 million over

the next 18 months, not the whole $6 million. But the city could lose

more in future years.

The agency is expected to receive, under preliminary proposals, $1

million in property tax revenue for 2003-04. The agency would also be

forced to pay back between $2 million and $3 million in savings,

Biggs said.

On Friday, Davis decided to eliminate a payment the state has made

to cities since 1998 to compensate for a two-thirds reduction in the

amount cities receive in revenue from vehicle license fees.

At the time, the reduction blew a $7-million hole in the city’s

budget, Silver said.

Several other streams of revenue have been lost since 1993, when

the state Legislature transferred a 20% share cities once received in

property tax revenue to schools. That move caused an $8-million loss

locally.

State lawmakers handed cities general-fund revenue to substitute

for that loss, money that Davis has now proposed be brought back to

Sacramento.

“They are breaking their promise to give us money from the state

budget,” Silver said.

In 2001, the city lost $9 million in revenue it had collected as

property-tax “override” to pay for retirement benefits for employees

when an Orange County Superior Court judge deemed the levy a

violation of Proposition 13 tax caps.

City leaders are expected to begin discussing Surf City’s

$135-million budget during public study sessions in August. The City

Council must approve a 2003-04 budget, when the city’s fiscal year

begins Oct. 1.

* PAUL CLINTON is a reporter with Times Community News. He

covers City Hall. He may be reached at (714) 965-7173 or by e-mail at

[email protected].