Counties float bonds to stay afloat


Arnold's repeal of the VLF (Vehicle License Fee) forces Monterey County and other local governments to sell bonds in order to make up for lost revenue.

From the Salinas Californian (n.b. that this link has been blinking in and out; it's not just you):

Monterey County supervisors agreed Tuesday to "sell" the promised $8.5 million that the county is scheduled to receive from the state in August 2006 to a statewide agency that will purchase the funds with the sale of a bond.

It's a financial deal that will allow Monterey County -- and about 40 other local governments, including Seaside and Salinas -- to get back vehicle-license-fee money from the state next month, instead of in 16 months.

Gov. Arnold Schwarzenegger repealed the vehicle-license fee, also known as the car tax, when he took office in 2003.

When he did so, he also made a budget agreement to repay the cities and counties the funds they lost by Aug. 15, 2006.


The bond issues allow the counties to have the money (...that they would have had in the first place if Arnold, Raiser of Tuitions and Slayer of Taxes on the Rich, hadn't eliminated this important source of revenue...) now, as opposed to next year. Further, they hedge the local governments against the possibility that the state won't pay them back in 2006.

Can we take the fact that they think they need a hedge as evidence that they're concerned the state won't pony up? I think we can.

I mention this issue (pun intended) here because of its relationship to an overarching talking point: Arnold ran on a state-budget-balancing platform, but a lot of what he's done (like repeal VLF) has made matters worse for governments at the local level without doing anything to help the state.

It's about as sexy as any point made about finance and local governments, but it's important.

Also, it's a rare example of a very specific promise that can be kept...or broken. Mark your calendars for August 15th, 2006. Will Arnold pony up?

Let's hope so, of course — but if he doesn't, someone ought to raise hell.

Posted: Wed - February 9, 2005 at 12:04 PM   | Category:     |   |   | |


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