Delays by the State Legislature in approving the budget could have dire consequences for local communities and schools, state parks and community colleges, according to state controller John Chiang.
Because the budget impasse has gone past July 31st, some state and local employees could see a delay in receiving their paychecks.
“For a lot of people, there could be a significant impact,” said Chiang. “Those who haven’t saved money are going to be hit hard.”
Locally, Santa Monica College (SMC) is not in immediate danger of being unable to pay its employees, says Randal Lawson, the school’s executive director.
“Santa Monica College, like a number of community colleges, takes an action at the beginning of our fiscal year that would allow us to receive a loan from the county to assist us with our cash flow when events like [a budget delay] occur,” Lawson explained. Not all community college districts employ the same fiscal policy mechanisms as Santa Monica College does.
“For some community colleges, a delay in their apportionment from the state could be a real hardship,” he said.
The unanticipated loss of revenue for local transit agencies and regional transportation departments to California cities has the potential to impact freeway and light rail projects that are already under way if the stalemate continues into the fall.
On July 20th, the Assembly and Gov. Arnold Schwarzenegger grabbed $1.3 billion earmarked for transportation needs that would have been used to pay for existing projects. Now, funds from the Proposition 1B bond measure, which were targeted for expanding rail extensions and future freeway endeavors will be used to cover current expenses and projects, such as the widening of Lincoln Boulevard.
Los Angeles County’s share of the transportation revenue was approximately $366 million.
“There is a concern about the amount of money that is being pulled from the Public Transportation Account,” said Douglas Failing, the California Department of Transportation (Caltrans) director for District 7, which covers Los Angeles County. “We anticipate that projects like Lincoln Boulevard that are currently programmed will not be impacted right now.”
How freeway projects will be affected may not be as a result of losing money from the transportation account.
“Without a state budget, the controller’s office would be unable to release money from the state transportation account to us, and that means that we would not be able to pay our contractors who work on many of our current projects, like the one on Lincoln Boulevard,” Failing explained. “So the lack of a state budget can have serious potential impacts to future and currently programmed Caltrans projects.”
Future endeavors, like work on the Route 105 Freeway at Sepulveda Boulevard, for example, could face delays due to failure to pass the budget.
Taking the funding set aside for transportation needs “wasn’t something that we necessarily wanted to do,” said David Ford, spokesman for Democratic Assemblyman Ted Lieu, who represents some of the local area. “Senate Republicans have insisted on having a zero budget, and the choice came down to public transit and cutting funding for schools.”
“If the budget is not finalized soon, then we can’t get a contract for our teachers — it’s that simple,” said A.J. Duffy, the president of United Teachers of Los Angeles, the union that represents the majority of Los Angeles Unified School District (LAUSD) teachers.
Other than stay in touch with their contacts and representatives in Sacramento, local officials find themselves in somewhat of a holding pattern until the budget stalemate is over.
“There’s not a whole lot that we can do right now,” Duffy conceded.
Democratic lawmakers in Sacramento and Schwarzenegger have insisted that money for school districts will not be touched to balance the budget. In a statement last month after the Assembly passed its version of the budget, the governor indicated that he was reluctant to touch education, a politically sensitive area.
“Bringing the operating deficit to zero this year would mean a cut to the education budget,” the governor noted. “The question now is whether we cut education funding, and I don’t think that’s what the people of California want.”
Duffy did not seem convinced that cuts in education were out of the question.
“Even though it’s encouraging to hear that Sacramento is saying that education funding won’t be cut, there are no guarantees that that won’t happen,” he said. “We’ve been through this before.”
Lawson said that, although Santa Monica College will be able to receive a county loan if need be, there is a limit to the amount of money that it could obtain.
“I believe it’s approximately $3 million,” Lawson said. If the impasse in Sacramento lingered through September, “there could be problems for most community colleges, including us,” Lawson added.
“It’s not a good thing for teachers to go into the classroom not knowing what their financial situation is going to be,” Duffy said.
Los Angeles school board member Marlene Canter, whose district includes Westchester schools, had not returned phone calls for comment on this story at Argonaut press time.
Ford agrees that for many local and regional agencies, planning how to make the best use of their financial resources is the most difficult problem they are facing.
“No question about it,” Lieu’s spokesman acknowledged. “How do you plan for anything if you don’t know what the budget is going to look like?”
Ford believes that the Assembly took “responsible action” by voting for a budget last month, and that the Republican senators are acting in an obstructionist manner by making what many Democratic lawmakers feel are unreasonable cuts to politically important programs.
The one thing that nearly all parties agree on is that if the budget talks are still ongoing by September, the ramifications of not having a budget could be severe.
“The longer the delay,” said Failing of Caltrans, “the greater the impact on our current and future projects.”