Bay Area Cities Take Budget Mess to Voters - WSJ.com

Bay Area Cities Take Budget Mess to Voters - WSJ.com

Cities Take Budget Mess to Voters

Measures on June 8 Ballot Seek New Taxes, More Control Over Union Contracts

By ROBERT A. GUTH And BOBBY WHITE

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Bay Area cities and counties, their finances hammered by state budget cuts, are turning to voters for help.

A raft of measures on next Tuesday's ballot are aimed at shoring up finances in local communities. Many center on proposed parcel taxes to offset declines in state funds. The city of Vallejo is pushing a measure to stop using outside arbitrators in disputes between the city and its workers, aiming to squeeze more money for its budget by whittling away public employee benefits.

The initiatives are crucial for the municipalities. California is grappling with a $19 billion budget deficit and has slashed services across the state.

In a sign of how hard hit municipal finances have become, school funding in the state—including taxes and state and federal sources—fell to $66.7 billion in the 2009-10 school year from $71.1 billion in the 2007-08 year, according to EdSource, a Mountain View nonprofit group that tracks education issues.

"I expect to see a lot more ballot initiatives over the next few cycles that are focused on finding new revenue or that will give cities more tools to deal with the down economy," said Eric Zeemering, a professor of public administration at San Francisco State University.

Here is a look at some of the June 8 ballot measures.

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Bay Area residents will be voting on whether to levy new taxes to help local governments. Students at Skyline College in San Bruno protested funding cuts in March.

Parcel Taxes

Voters in Alameda, Contra Costa, San Francisco, San Mateo and Santa Clara counties will decide on new taxes to help K-12 schools offset declining state funding.

The parcel taxes, which levy a flat tax on landowners, are increasingly common in California communities, which raised $251 million with parcel taxes in the 2008-09 school year, compared with $114 million in the 2003-04 year, according to the Education Data Partnership, a group of education nonprofits and the California Department of Education.

The parcel tax is particularly favored by Bay Area cities. Of the 83 school districts that passed parcel taxes between 2001 and 2009, 66 districts were in the Bay Area, according to EdSource. In the Bay Area, "there is a more liberal attitude towards taxation than you will find in many other areas of California," said Mary Perry, EdSource's deputy director.

In more economically robust times, school districts typically relied on bond issues to pay for programs and services.

But the down economy has pushed districts away from bonds to parcel taxes, said Valory Logsdon, research specialist at California State University, Sacramento's Institute for Social Research.

While no firm figures are available yet for the current election, a preliminary look indicates there