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R-9868 F:\ATTY\MUNI\LAWS\JL\balanced budget res.doc City Council Meeting June 24, 2003 Santa Monica, California RESOLUTION NUMBER9868 (CCS) (City Council Series) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA URGING THE CALIFORNIA LEGISLATURE TO USE A BALANCED APPROACH IN ADOPTING THE STATE BUDGET WHEREAS, the State of California is facing the worst budget crisis since the 1930s Great Depression, threatening the ability of state and local government to deliver essential services and threatening the long-term fiscal health of state and local government; and WHEREAS, counties and cities are in the midst of approving their own operating and capital budgets for the 2003-04 fiscal year and cannot adequately make decisions about the funding of local government services until the state budget is finalized; and WHEREAS, the State of California is facing a $38 billion deficit, and dramatic measures must be taken to reduce spending and protect state and local services; and WHEREAS, the city and county officials of California understand the interdependence of the fiscal condition of state government and local government; and 1 WHEREAS, the financial condition of the State of California is so serious that it is incumbent upon state leaders to both cut spending and enact temporary increases in revenues to avoid making future generations of Californians pay for the budget deficit; and WHEREAS, local officials have already taken measures to reduce local spending, but the failure to adopt a balanced budget could imperil local services; and WHEREAS, the boards of directors of the League of California Cities, California State Association of Counties and California Special Districts Association have endorsed a set of principles calling for a balanced approach to managing the state budget deficit; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES HEREBY RESOLVE AS FOLLOWS SECTION 1. The City Council urges the State Legislature to follow the balanced budget principles set forth below when adopting the State Budget: . Spendinq Cuts. Reduce the current estimated deficit through state spending reductions, minimizing federal fund loss where possible. . Short-term Borrowinq. Because of the amount of partisan gridlock, finance part of the budget deficit over a period of up to 5 years through the issuance of short- 2 term debt instruments, secured by temporary taxes that are dedicated solely to retiring the short-term debt. ยท Revenues for Deficit Reduction. Adopt a set of tax increases dedicated solely to retiring the short-term debt and the remaining structural deficit. . Reserve. Require a prudent reserve that could be accessed during economic shortfalls. . VLF Covenant. Keep the VLF covenant made to local governments, by activating the VLF trigger or continuing the state General Fund revenue backfill, . Local Government Reductions. Limit the local government share of overall budget reductions to a one-time amount not to exceed the proportion of state subventions to local governments as a percentage of the state general fund budget. . SECTION 2. The City Clerk shall certify to the adoption of this Resolution, and thenceforth and thereafter the same shall be in full force and effect. APPROVED AS TO FORM: flAl1j/.!IA~ ~ MARSHA JONE MOUTRIE City Attorney ~ Adopted ., appicwed ~ 24th day Pr June, 2e03. I, Maria M. Stewart, City Clerk of the City of Santa Monica, do hereby certify that the foregoing Resolution No. 9868 (CCS) was duly adopted at a meeting of the Santa Monica City Council held on the 24th day of June, 2003, by the following vote: Ayes: Council members: O'Connor, Holbrook, Genser, Katz, Feinstein, Mayor Pro T em McKeown Noes: Council members: None Abstain: Council members: None Absent: Council members: Mayor Bloom ATTEST: ~~.~.....} Maria M. Stewart, ity Clerk