Local officials welcome revenue protections from Proposition 1A Local officials welcome revenue protections from Proposition 1A (November 17, 2004)

Passage of Proposition 1A in the November 2 election prompted a collective sigh of relief from local government officials, who say that although the new rules are far from perfect, they will protect local services and allow for better long-term budget planning.

When the measure takes effect in July 2006, city, county and special district officials won't have to delay budgetary decisions for fear the state will keep property-tax revenue that should be given to local governments. That's because state Proposition 1A restricts the state's ability to dip into those revenues as it has done for a number of years, causing local governments to cry foul and seek voter support to end the practice.

"It's but one step toward fiscal reform that's essential in California," said Menlo Park City Manager David Boesch. "This provides a modicum of protection going forward into the future, allowing us to predict with greater certainty and confidence what our revenue picture is going to be."

Local governments throughout the state in recent years have had to cut services and raise fees to try to make up for the shortfalls caused by the state's money grabs, which legislators have said were necessary to help keep the state solvent and schools properly funded during economic hard times.

Proposition 1A was a compromise measure crafted by the governor and the League of California Cities. The league had helped write another measure on the November ballot, Proposition 65, which would have put more severe limits on the state, but it agreed to support the compromise measure after it was painstakingly hammered out as the deadline for placing measures on the ballot approached.

The measure includes a provision that allows state legislators, as of fiscal year 2008-09, to approve by a two-thirds vote an emergency declaration that would allow property-tax revenue to be shifted to schools. Such a "loan" would have to be paid back within three years, with interest.

Angela Howard, Portola Valley's town administrator, said the measure is "a big step forward in giving towns and cities more financial security." But she added that she would have liked a bit more protection to prevent or more seriously limit emergency revenue shifts. "Declaring a financial emergency is not that hard to do, if you think about it," she said.

For now, local officials are biting the bullet during the period before the July 2006 effective date for Proposition 1A. For example, Woodside Town Manager Susan George said the town, with a $5.2 million budget, will lose about $78,000 in revenues in both this and next fiscal year.

Menlo Park will lose $543,000 in both years, Mr. Boesch said, but also will be hit by take-aways from its redevelopment agency, which funds improvements to the eastern portion of the city that includes the Belle Haven neighborhood. Mr. Boesch said the agency is projected to lose about $900,000 this fiscal year after taking a hit of $600,000 last year.

Proposition 1A passed in San Mateo County with 85 percent approval, with 203,578 votes, according to the unofficial tally. Votes against the measure totaled 35,927.

Statewide, the measure passed by almost the same margin, with 8,403,103 (83.7 percent) votes for and 1,644,153 votes against.

Proposition 65 was supported by only 38 percent of county voters. The county figures are almost identical to the statewide figures for this measure. -- Almanac staff report

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