Cuts Could Still Loom for City, Education Despite $15 Billion Bond

By Olin Ericksen
Staff Writer

March 4 -- On the day after Governor Arnold Schwarzenegger cleared his first major political hurdle with a big boost from California voters, City and education officials expressed relief that Propositions 57 and 58 are state law, but warned that budget cuts could still be looming.

With Propositions 57 and 58 winning a mandate-style approval from California voters -- garnering 63 and 71 percent of the votes respectively -- the State’s historic budget deficit will be bridged with a one-time $15 billion bond and a state balanced budget act that designates an $8 billion reserve.

But that doesn’t mean the City and the local College and School Districts are out of the woods. At City Hall, Santa Monica’s finance director, Steve Stark, gave a sobering analysis of Tuesday’s results.

The City, he said, "anticipated" the measures would pass when it calculated a $4 million buget gap in the upcoming fiscal year that likely will grow to $4.7 million under additional cuts in the governor's balanced budget proposal.

“We’re not breathing a big sigh of relief just yet, but we’re glad that Propositions 57 and 58 passed,” Stark said. "We feel like maybe there's a little more certainty, and we can be a little more comfortable that we won't get further cuts from the state."

Although the $15 billion bond may hint that further cuts at the local level may not be in store in the future, Stark said, Santa Monica won’t be certain until the state finalizes its revised budget in May.

“It’s still early in the budget season,” Stark said, adding that if the state comes up short in its budget, elected officials in Sacramento historically turn to local municipalities like Santa Monica to make up the difference.

Mayor Richard Bloom, who signaled he voted for Props 57 and 58, but wished that other funding alternatives would have been examined, agreed with the City’s finance director’s assessment of the Santa Monica’s financial situation.

“California voters have spoken,” Bloom said. “Now we must move forward and focus on maintaining state funding for local government.

“Municipalities continue to be at the mercy of the governor and legislature, creating great uncertainty in the process,” he said. “We cannot allow the state to continue siphoning money earmarked for local government.”

Santa Monica education officials can wipe a bead of sweat off their brow because they say the new laws bring a degree of certainty to cash-strapped school budgets.

“In general, Santa Monica College is very pleased that 57 and 58 passed,” said SMC spokesman Bruce Smith.

Between $2.7 million and $3.6 million in “equalizations funds” -- or funds to equal out what community college districts receive per student -- were in question if the propositions failed. Currently, Santa Monica College is the lowest-funded community college in the state, according to school officials.

The $15 billion bond will provide stability in the state budget, said Smith, which will in turn allow the College district to shore up its own budget. Further, the balanced budget act and its large reserve will provide increased certainty in SMC’s finances “for years to come.”

Smith also greeted the passage of Proposition 55, which established a $12.3 billion bond that provides $920 million over the next two years for California community colleges for building projects.

Although the college may not be currently affected by Prop 55, its passage “means it will be easier to get on a facilities repair-list in the future.”

Propositions 57 and 58 should have similar effects on the Santa Monica Malibu Unified School District.

Superintendent John Deasy said in an earlier interview with The Lookout that the school district’s budget would be in peril if the tandem measures didn’t passed.

Despite their passage, at least 23 programs could still be cut to close a looming $3.5 million deficit under the state budget proposed by the governor, Deasy has said.

Prop 56, the only measure not to pass, would have required 55 percent of the state legislature’s vote to adopt a state budget, rather than a two-thirds majority.