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    LB City Mgt. Says State Budget Deal Isn't Everything Hoped For But Offers Most Significant Protection of Local Gov't Finances In Many Yrs

    (July 27, 2004) -- In a tempered but basically optimistic initial assessment, LB City Manager Jerry Miller has said that for local governments, the tentative budget deal reached between state lawmakers and the Governor "is not all that the League of California cities had hoped for [but] it is the most significant offering of protection of local government finance we have seen in many years."

    In a July 27 memo to the Mayor and Councilmembers, City Manager Miller says:

    Thanks to the leadership of the League [of CA Cities] and the Big Ten Cities (of which Mayor O'Neill has been intensely involved), we have been given unprecedented access, influence and support from Sacramento...[The tentative state budget agreement]...has been supported by the League Board, and it was my recommendation to the Mayor that the City of Long Beach support this deal as well.

    The City Manager attached a memo from the firm headed by Mike Arnold, City Hall's state legislative advocate, which noted that the spending plan closes a nearly $17 billion budget "shortfall" with cuts, funding shifts and borrowing. Mr. Arnold's memo said in pertinent part:

    ...Both parties have their own claim to victory in this deal. The Democrats were able to block additional health, social services and university spending cuts. The Republicans ensured that this budget contained no tax increases, eliminated some newly proposed fees, and provided for transportation projects.

    General provisions of the deal include the following:

    • Local Government Spending Deal: Under the new deal, cities, counties and special districts will accept $2.6 Billion in cuts over two years and lawmakers will place a constitutional amendment on the November 2d Ballot to safeguard local treasuries in the future. Local leaders agreed to drop their objections to a plan to let future legislatures borrow a limited amount of property tax revenues with approval of two-thirds of the Legislature during fiscal crises. Under the agreement, the state could borrow money from local governments only twice in a 10-year period and would have to repay the loan with interest.

    • Deal Reached on "Sue Your Boss" Legislation: A compromise was also reached on the so-called "sue your boss" law that Republicans and the CA Chamber of Commerce wanted to kill. Lawmakers agreed to change the law to let employers fix labor violations before workers could take the matter to court. Many had complained that the law led to frivolous lawsuits over minor violations such as improper font sizes on workers' rights notices, etc. Senator Joe Dunn (D., Santa Ana), the author of the statute, worked closely with legislative leaders on the compromise.

    • All Agree to Deal with Union Bill After Budget is Passed: Another compromise was that all agreed to postpone discussions on the law that restricts school districts from hiring private firms until the budget is passed...

    City Manager Miller's memo adds that as further details become available, City Hall's Financial Management Department "will analyze the impacts on the City of Long Beach, and I will provide you with a report in my budget presentation to the City Council."

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