SOURCE: League of California Cities

May 13, 2005 20:23 ET

League of California Cities' Statement in Response to Governor's May Revise

SACRAMENTO, CA -- (MARKET WIRE) -- May 13, 2005 -- Governor Schwarzenegger has presented a budget plan that recognizes and respects the important role local government plays in delivering vital services and stimulating economic growth.

The League and our 478 cities were extremely pleased earlier this week to learn that the governor was planning to fully fund Prop 42 transportation projects, including funds that Prop 42 allocates for local street and road maintenance projects. Today the League also thanks the governor for his decision to repay cities and counties $593.4 million -- half of the $1.186 billion in vehicle license fee gap loan that the state borrowed in June of 2003.

California cities are contributing $350 million this year and in FY 2005-06 as part of the Prop 1A budget agreement. An additional $250 million for the two years is being contributed by redevelopment agencies. The restoration of the Prop 42 funds and the early, partial repayment of the VLF gap loan will help cities still facing tight budgets as a result of these Prop 1A funding losses.

League President and Novato Councilmember Pat Eklund said: "The governor's proposal is a huge win for the people of California. It keeps faith with the voters who supported both Prop 42 and Prop 1A. It keeps a promise the state made in 2003 to local governments to repay the VLF funds it borrowed during a time of fiscal crisis. It reduces the state's debt. And it restores much-needed funds that the state took from cities and counties -- monies that are now restored so that cities can address pressing local priorities."

League Executive Director Chris McKenzie said: "The governor's recommendations to accelerate repayment of the VLF funds borrowed a few years ago is a real boost for better city services and stronger communities. We applaud his action and urge the Legislature to approve this partial repayment of this obligation to the residents of the cities of California."

Contact Information

  • Contact:
    Megan Taylor
    Cell, 916.705.6679