Governator and Republicans’ Raid On Cities Will Cut Hundreds of Local OC Cops

(Crossposted from Orange County Progressive where we’re getting pretty damned tired of the Republican’s lies.)

PhotobucketAlready facing dramatic budget cuts from drops in sales tax, hotel tax, and property tax, local cities will need to cut public safety – cops on the street. It’s the lion’s share of their budget, and they’ll need to cut into law enforcement to cover Republican plans to raid local government revenues.

Orange County cities will lose the equivalent of 600 cops on the street for one year, not counting money that will be lost by county sheriffs.

After voters rejected one more round of fiscal chicanery, we’ll finally be paying for the effects of the Governator’s decision to cut the car tax, and the Republican elimination of the California estate tax.

Other than prisons, the payment for these irresponsible tax cuts is the only area of the budget that has shown real growth in the last decade.

Paying for these tax cuts and the profligate borrowing to support them now costs California over $7,000,000,000 (That’s seven billion) a year. Rather than admit mistakes, California’s worst governor ever is now preparing to “borrow” 2 billion from local government.

And Republican legislators are still peddling the same stale lies that Arnold sold about billions of savings a year from waste and fraud. They’ll find that about the same time OJ finds the real killer.

Below the flip, is the city by city breakdown of the Republican raid on local government. A city will save around a $110,000 a year for each patrol officer they cut. Cities have strict limitations on how they raise and spend funds. They can’t pay for law enforcement with higher water rates or building fees, and they have already made deep cuts to everything except public safety.

And as you wait for that emergency response that doesn’t come when you call 911, ask yourself why California isn’t taxing oil companies the same way Texas and Alaska do, or why we don’t have a state estate tax that is fully deductible against Federal estate taxes, like Ohio and New York.

And hey, you’ve got a little extra time to really celebrate that cut in the car tax that John and Ken demanded.

Estimates of cost of 8% raid on local law enforcement budgets, by City.

Aliso Viejo 554,818

Anaheim      6,138,968

Brea      1,001,355

Buena Park    1,554,929

Costa Mesa    3,323,548

Cypress        945,132

Dana Point 826,114

Fountain Vly  1,243,587

Garden Grove  2,472,808

Huntgton Bch  5,138,564

Irvine      4,675,400

Laguna Beach  2,144,012

Laguna Hills    843,608

Laguna Niguel 1,651,854

Laguna Woods 169,090

La Habra      1,256,796

Lake Forest   1,370,493

La Palma 328,096

Los Alamitos 286,361

Mission Viejo 2,551,393

Newport Bch   6,085,147

Orange      6,085,147

Placentia     1,040,888

RSM     603,962

San Clemente  2,176,959

San Juan Cap 873,525

Santa Ana     5,710,116

Seal Beach 710,782

Stanton        448,675

Tustin      1,643,816

Villa Park 158,447

Westminster   1,203,779

Yorba Linda   1,571,299

Total (not including County cuts) $66,789,468  

2 thoughts on “Governator and Republicans’ Raid On Cities Will Cut Hundreds of Local OC Cops”

  1. Some people may say that local governments facing the forced borrowing of millions from them for a period of up to 3 years can just borrow the money on Wall Street until the State pays them back.  

    While it is true that the State will allow locals to do this, such borrowing would come at a significant cost.  (I am familiar with the situation through my work with the County of LA)

    Any local gov’t that can’t deal with the cash shortfall for the 3 years will have to borrow the funds on the credit of the State, which has the worst credit rating of all states.  It doesn’t matter how good the city/county’s credit rating is because repayment will come from the state.  Rates will be high (5%), and you have to secure a line of credit to provide additional security (2%) — at the end of the day, borrowing will be in approx 7%.

    That’s a really high rate, and several other features make such a borrowing even more expensive.

    If repayment from the state comes before the 3 year deadline, a borrower won’t be able to pay back the notes early.  These are non-callable.  That means that each year, the pot of money gets eaten away at 7% a year.  Multiply that by 3 years, and that means 20% of the payment due from the state will be eaten up by borrowing costs – that’s call a “haircut”.  

    It gets worse — tax exempt borrowing proceeds have to be used on capital expenditures.  If you’re planning on using the money to pay for ongoing services and programs, then you can’t borrow at tax exempt rates.  You have to borrow at taxable rates.  That turns the 20% haircut into a 30% haircut.  

    I’ll use Los Angeles County as an example — the state raid on LA County would be approx $301 million.  It would cost us at least $60 million or $90 million to borrow the $301 million that the state owes us.  

    The sad thing is that even at these extraordinarily high costs, I would expect a bunch of local gov’ts will have no choice but to do the borrowing in order to stay solvent.  

    These costs need to be included when discussing the harm that more borrowing will do to our state.  

    We need to bring in real revenues.  

    In order to borrow this money at this interest rate, the cost to the local government would be  

    The forced borrowing of property taxes from local governments can extend up to 3 years.

    If a local gov’t will need to get its hands on the cash in the interim, it will have to borrow to get the difference.  Most local governments are already under stress, so it’s likely a bunch of them will be forced to borrow.

    The borrowing will need to be done on  

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