State Budget Positive for California Cities

Gov. Arnold Schwarzenegger released his proposed 2007-08 state budget. The budget spells out the Governor's plan to accomplish the ambitious agenda for California that he outlined in his State of the State address on January 9.

For cities, the budget continues to support key city programs and provides a vision to implement the infrastructure bond package which is critical to local services and local economies, and was passed by the voters on the November 2006 ballot.

"We're still analyzing the proposal to get a more complete picture, but our first review is that it looks quite positive for cities," said League President and City of Pinole Mayor Maria Alegria. "Clearly, this budget proposal shows that Gov. Schwarzenegger understands the relationship between the fiscal health of California cities, the services they provide and the overall economic well being of the state."

The highlights in the state budget for cities include:

Transportation: The Governor proposes a plan to implement the Proposition 1B transportation bond money passed on the November ballot. Over time, Proposition 1B will provide approximately $7.1 billion directly to local governments. For 2007-08, the Governor proposes the following allocations of direct importance to cities:

-- $600 million for local streets and roads, split evenly between cities
and counties
-- $600 million for local transit
-- $170 million for state and local partnerships
-- $340 million for STIP
-- $55 million for grade separations
-- $9 million for seismic bridge separations

Public Safety: The Governor proposes in his budget to continue the critical Citizens' Option for Public Safety (COPS)/Juvenile Justice Grants. The budget includes $238 million for this program, fully funding it. The money goes directly to enhancing public safety services.

The budget also includes $35 million, pursuant to last year's AB 1805, a bill that enacted a compromise measure to fund booking fees mandates. This is the same funding level as contained in the 2006-07 budget.

Housing: To implement Proposition 1C, the housing bond measure passed by the voters in 2006, the Governor's budget includes $654 million in Proposition 1C funds for California's housing needs. The Department of Housing and Community Development (HCD) expects to make $373 million in awards to the following programs areas authorized by Prop. 1C:

-- $88 million Affordable Homeownership Programs
-- $30 million for CalHFA programs
-- $15 million for California Downpayment Assistance Program
-- $15 million for the Residential Development Loan Program
-- $140 million for the Affordable Rental Housing Construction Programs
-- $40 million to Housing for Farmworkers
-- $95 million to Homeless Permanent Housing Construction
-- $10 million to Homeless Shelter Housing Construction

Additionally, the Governor's budget proposes to fund two other programs within Prop. 1C money. These are:

-- $40 million to the Building Equity and Growth in Neighborhoods (BEGIN)
-- $95 million to the Transit-Oriented Development Program

The budget also includes $145 million in awards for the following three programs in Prop. 1C that require further legislation:

-- $100 million for Infill Incentive Grants
-- $15 million for Affordable Housing Innovation
-- $30 million for Housing and Urban-Suburban and Rural Parks

League Executive Director Chris McKenzie complemented Gov. Schwarzenegger on his support for local government and its programs.

"The Governor continues to recognize the importance of the partnership that has been forged between the state and local government when providing services to the citizens of California," he said. "We offer our support in working with the Governor and the Legislature to make these local government programs a reality."