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City Protests More State Borrowing
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Riverbank has joined the chorus of protest by local governments against the state's proposals to seize or "borrow" additional city property tax funds and impose more unfunded mandates.

The Riverbank City Council on May 26 adopted a resolution strongly opposing a May 5 California Department of Finance proposal to "borrow" $2 million of additional local funds, including property taxes, redevelopment tax increment and the city's share of the Proposition 42 transportation sales tax.

"We estimate Riverbank could lose $273,000. The resolution has no teeth. But at least we are taking a stand. If we lose that much, it could mean more layoffs, more cuts," said City Manager Rich Holmer, in encouraging residents to call their legislators and lobby them.

The current economic crisis has placed cities under incredible financial pressure, Administrative Services Director Linda Abid-Cummings advised the council. Since the early 1990s, the state has seized over $8.6 billion of city property tax revenues statewide. The legislature, in addition, is now considering hundreds of bills, many of which will impose new costs and unfunded mandates on local governments that they cannot afford or sustain.

In 2004, the voters by an 84 percent vote margin adopted substantial constitutional protections for local revenues but the legislature can still "borrow" local property taxes to fund the state budget.

The Governor has called such borrowing proposals fiscally irresponsible because the state will find it virtually impossible to repay and it will only deepen the state's structural financial deficit.