| Not content to threaten to burn down the state if voters reject Prop 1A, Arnold Schwarzenegger is now threatening to raid local government funding. That Arnold would even contemplate this step shows just how much of a failure he is at governing, and how fundamentally reckless and destructive his administration has been.
As David Dayen explained it yesterday:
Under yet another Prop. 1A from 2004, the state can borrow 8% of property tax revenues (about $2 billion), which would have to be repaid with interest in three years. The credit cards are open for business again! While this measure represents 10-15% of the total projected budget gap, it would decimate services at the city and county level, services that - voila! - the state would need to step in to provide. Also the Governor cannot pull this off unilaterally: it would require a 2/3 vote of the legislature.
The consequences of this would be dire. Our friends at OC Progressive laid out the local impact there:
Fire agencies at every level in Orange County are already under pressure, with sales tax revenue dropping by double digits and declining revenue from every other source of taxes. Agency by agency, rolling hiring freezes are turning into actual layoffs.
And if you understand what happens when wildfires rage in California, you should be frightened. When wild fires burn in Yorba Linda or Orange, every fire agency, large and small, contributes men and equipment to strike forces that go where they are needed, while working cooperatively through mutual aid agreements to make sure that local needs are still met. They put every piece of equipment into the field, and every firefighter works overtime.
The LA Times projects a further $300 million deficit for the LA County area - on top of the nearly $1 billion they already faced - if Arnold's attack on local government goes forward:
The city of Los Angeles stands to lose more than $67 million, according to the two-page draft proposal. The county, meanwhile, could be particularly hard hit, by some estimates potentially seeing $250 million or more drained away to help the state balance its books.
Cities and counties would probably have to increase layoffs of police, fire, public heath, recreation and other workers, according to the draft.
Even without the raid on local government funds, cities are in a dire position - Oakland mayor Ron Dellums is proposing mass police layoffs to close a $100 million hole.
Dan Walters did an especially good job of calling bullshit on Arnold's scare tactics. But we can and should go further. Why aren't Democrats denouncing these proposals?
A raid on local government funds will push numerous cities, already reeling from the loss of sales tax revenue in a consumption-led downturn, into bankruptcy. Mass layoffs and permanent scaling back of core services will be the result. Additionally, raiding local government will cause public confidence in Democratic legislators to decline even further, and make it difficult for them to add to their seat totals in 2010 or to push through the kind of major reforms we need to fix this mess.
Dems should resist the temptation to go along with Arnold's scare tactics. Those tactics merely anger voters and make them more likely to vote no on all the propositions. Dems need to be projecting an attitude of competence and of determination to protect vital services. They'll need to do that no matter the outcome of May 19.
Raiding local government would push California deeper into recession, and would create further long-term budget problems, especially in 2011 or 2012 when the raided funds would have to be repaid with interest. Dems ought to make it clear that they will never give their votes to this kind of screwy plan, and need to push back hard against Arnold's reckless threats.