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Calif. Budget Deal Could Cost San Diego Millions

— A tentative deal reached by state legislators to close California's $26 billion deficit could cost the city of San Diego $100 million and the county another $150 million, officials said today.

The state's budget proposal, which is expected to be voted on Thursday, relies heavily on cuts to education, health care and social services, and borrowing billions of dollars from cities and counties.

"Let me be clear about that deal -- I'm very disappointed that they are taking local money, and this will have an impact on the services you rely on," San Diego Mayor Jerry Sanders said.

However, municipalities could be spared from the state's plan to borrow or take $3 billion in property tax and gasoline tax revenues if redevelopment districts throughout California voluntarily agree to forfeit 10 percent of their revenues, according to Sanders.

"If the state can raise $3 billion from this by December 1, they will forgo the taking of property and gas taxes," Sanders said. "If not, they will move immediately to collect those funds from municipalities."

Sanders said the deal "could greatly reduce the impact to local governments, but that's if it works."

"If it does not work -- and bear in mind we see a huge potential for failure -- it could be even more disastrous for local governments than straight taking today because of when it falls on the budget cycle," he said.

The state's budget proposal already relies on $44 million in cuts from redevelopment funds, adding to the unlikely chance the agencies would agree to the deal, according to Sanders.

San Diego and municipalities around the state have threatened to sue California if the state takes gasoline tax revenues. The League of California Cities has a lawsuit drawn up and ready to go.

Sanders said the budget compromise reached by state legislators could have a "disastrous effect" on local spending plans, suggesting that cuts to public safety would be considered.

"It's going to be deep cuts," Sanders said. "I'm prepared, if we have to, to cut public safety. That's a place we have not wanted to go in the past, but we are starting to reach that point."

Sanders said the city has already trimmed $176 million from its budget over the last calendar year.

"If we have got to add on top of that another $60 to $80 to $100 million, we are going to see some fairly dramatic cuts," he said.

According to Dianne Jacob, chair of the San Diego County Board of Supervisors, the state's proposal to shift or take upwards of $150 million from the county would mean longer lines for services, less public safety and fewer road projects.

Supervisors Bill Horn and Ron Roberts called the borrowing from local jurisdictions "stealing."

Walt Ekard, the county's chief administrative officer, told supervisors he will study the impacts of the proposed state budget agreement, but concurred with Jacob that the impacts will be dire.

He said the county's budget for fiscal year 2010, which started on July 1, will need revising by the fall.

"It's one fine mess our state leaders have gotten us into," he said.

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