News Release
May 14, 2009
Concord declares that further state funding cuts would be devastating
Proposed state raid of local property tax threatens City
The Concord City Council passed a resolution at its meeting Monday, May 11 declaring a state of severe fiscal hardship. This action follows a recommendation by the State of California Department of Finance to borrow $2 billion (8 percent) in local government property taxes to meet the state's budget shortfall.
"The City of Concord can't afford the state's raid on our property taxes when declining property and sales taxes have already forced the City to propose police and employee layoffs, unpaid furloughs and reductions in services to balance the budget," said City Manager Dan Keen.
In Concord, the state property tax grab equates to approximately $2.4 million that the City will lose in services in the community.
"We are already fighting to fill a $14 million hole in an $80 million budget. We can't afford another $2.4 million on top of that." Keen said.
As it is, the City is already spending down its reserves and looking at severe program cuts and possible layoffs.
In a deal struck in the early 1990s, the state began to siphon local property tax revenues from California cities. Through fiscal year 2007-08, the City of Concord has paid the state $31,442,455.
The loss of more than $31 million has left the city in an undesirable position even before the economic downturn drastically cut funds available to the City for services to the community. The City is also buried under the weight of unfunded state mandates. In the resolution, the City Council urges the state to stop imposing new costs on local governments that they can't afford and can't be sustained.
"Borrowing to solve the state budget problem is irresponsible, deepens the state's deficit and harms communities. It's the practice of borrowing and the fact that the state isn't facing up to its obligations that caused California to be in this fiscal mess," said Mayor Laura Hoffmeister.
In January, the City cut $4 million in expenditures from its budget, resulting in the elimination of 16 part time and contract positions, the loss of 10 full-time positions, elimination of after-school programs, public safety programs, and reduction in police public office hours.
"The state needs to recognize that the effects of the economic downturn are wide spread and taking local property taxes at a time like now will further devastate our community and hurt everyone in our city," said the Mayor.
The situation in Concord echoes what is happening in cities across the nation, many of which are facing mounting deficits. Felix Rohatyn, the investment banker who helped New York City through its financial troubles during the 1970s, is calling on the federal government to create an agency to rescue struggling cities.
The declaration of fiscal hardship is reflective of how bad things are locally.
"Our city simply can't sustain the loss of any more property tax funds or to be saddled with any more state mandates as they will only deepen the financial challenges facing our city," said the Mayor.
Contacts
Leslye Asera, Community Relations Manager, (925) 671-3272
lasera@ci.concord.ca.us