Coalition Urges Wilson to Aid Local Governments

SACRAMENTO —  A coalition of business, building and local government groups called on Gov. Pete Wilson on Tuesday to help financially struggling cities and counties--setting up what could be a major tussle in this year’s state budget battle.

“We think it’s one of the most critical issues facing the state,” Assemblyman Michael Sweeney (D-Hayward) said, adding that “unfortunately [Wilson] has not shown a willingness” to assist local government.

Wilson, who is scheduled to release his budget proposal Thursday, is expected to ask local government to take a greater role in providing services such as welfare, and will “provide funds and flexibility,” said H.D. Palmer, spokesman for the state Department of Finance.

But the governor is unlikely to offer financially strapped cities and counties what they want--a return of some or all of the $3.6 billion in property tax revenue they once received but that now goes to schools.

Starting in 1993, Wilson and the Legislature, attempting to comply with education funding requirements, began shifting more than $3 billion annually from local government to public schools.

That shift has forced counties, cities and other local governments to cut services. More recently, voters approved Proposition 218 in November, placing new limits on local government’s authority to impose taxes.

But now, lobbyists for local government have formed a lobbying association with the state Chamber of Commerce, the Building Industry Assn., the real estate industry and labor unions that represent public employees to press Wilson for a local aid package.

Builders and the real estate industry have a stake in the fight because without state aid, local government may impose higher development fees, which would add to the cost of housing.

At a press conference Tuesday, Richard Lyon, lobbyist for the building industry, said that while much of California has recovered from the recession of the early 1990s, housing construction remains at “recessionary levels,” and said local government’s woes are a “disincentive to new housing.”

“If we can’t [pay for] the libraries, if we can’t do the roads . . . then we’re not going to attract new businesses,” said Daniel Wall, lobbyist for the California State Assn. of Counties.

To emphasize their more aggressive stand, Wall, Lyon and more than a dozen other lobbyists held the press conference in the Sacramento office of Nielsen, Merksamer, a law firm that represents Wilson on political matters. The firm also lobbies in the Capitol, and represents Marin and San Diego counties, which are involved in the fight.

Wilson last year vetoed a bill by Assemblyman Fred Aguiar (R-Chino) that sought to permit counties to keep a portion of the property tax money that now goes to schools.

“It’s not really a glamorous issue,” Aguiar said Tuesday. “It’s easier to walk away from this issue.”

But he insisted he has no intention of letting the issue die. He reintroduced his bill this year, along with a separate measure that could end up on a statewide ballot if Wilson fails to come to the aid of local governments.

Sweeney, meanwhile, is proposing that Sacramento permit local government to retain some money raised by state income taxes.