State budget woes worrying county
With the state’s projected budget deficit growing by billions of dollars a month, Nevada County officials and legislative insiders fear the county’s share of vehicle license fees could go on the chopping block.
For Nevada County, that would mean a loss of $3,550,000 in state funds.
“The budget of the state of California is substantially in the red” and the shortfall keeps growing, said Don Peterson, a senior partner with Peterson Consulting Inc., the county’s state legislative lobbying firm.
During the last update on the state budget process heard by Nevada County supervisors in December, there was talk about a $12 to $14 billion shortfall, said Tim Snellings, the county’s director of intergovernmental affairs.
By February, the projected deficit had grown to $17 billion “and now it’s up to $22 billion,” Snellings said and Peterson confirmed.
Gov. Gray Davis said he wouldn’t reduce the allocation of vehicle license fees going to local jurisdictions, but county officials across the state are concerned that the $4 billion pool may be “too attractive to ignore,” Peterson said.
The state Legislature gave auto owners a tax break two years ago by reducing vehicle license fees and backfilled the revenue void with money from the state’s general fund “to the tune of $4 billion,” Snellings said.
Now that the state’s budget surplus is gone, Snellings said “the fear is that (the legislature) will reduce allocations to counties and cities.”
According to Peterson, Davis said that if the legislature removed the backfill to local jurisdictions, vehicle license fees would be used to keep the allocation to counties and cities whole.
But that may be portrayed as a tax increase, Peterson said, which wouldn’t be a popular move heading toward the November general election.
The county’s portion of vehicle license fees funds road repairs and improvements, and provides discretionary money for health and welfare services and programs, said Laura Matteson, the county’s senior administrative analyst.
“If the state didn’t backfill or raise vehicle license fees to where they were two years ago, the impact to the county would be a loss of $2.7 million in road funds and a $850,000 cut to the general fund for health and welfare services,” Matteson said.
Davis said he wouldn’t balance the state budget on the backs of counties and cities, “but you never know until it’s a done deal,” she said.
Davis’ revised budget message comes out May 14.
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