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Mayor Sanders Reacts To State's IOU Plans

POSTED: 2:17 pm PDT July 2, 2009
UPDATED: 2:20 pm PDT July 2, 2009

It's unclear whether tax revenue payments due San Diego will be on time as California legislators continue to battle over the state's budget, Mayor Jerry Sanders said Thursday.

The mayor said San Diego won't be impacted by the so-called IOUs being issued by the state, but other funds slated for the city could be at risk.

"The state gets all of our property tax before we get it," Sanders said. "The state gets all of our vehicle license fees before we get it. The state gets all of our sales tax before we get it. So while we probably won't get IOUs, we don't know what schedule they will pay."

Sanders reaffirmed his threat to sue the state if it tries to take $24 million in gasoline tax revenue due the city.

If gasoline tax revenue money is shifted away from municipalities, the League of California Cities has a lawsuit ready to go that San Diego and a number of cities have agreed to endorse, Sanders said.

"We're not going to take this lying down," he said. "They cannot start stealing things from us without any type of security or repayment plan."

Another $36 million in property tax revenues that is supposed to go to San Diego is also at risk, although legislators have largely backed away from that idea, according to Sanders.

"If we have to cut another $75 or $80 million out of our budget you will see dramatic impacts to the public," he said.

One day into the new fiscal year, legislators in Sacramento are still battling over how to close a more than $24 billion deficit. Democrats want to raise revenues and Republicans want to cut services, and so-far there has been very little progress.

As the budget debacle wears on, the state is preparing to issue IOU's because it is running out of cash.

Gov. Arnold Schwarzenegger has declared a fiscal emergency, and ordered state workers to take more unpaid furlough days.

At a morning news conference in Los Angeles, Schwarzenegger chided the Legislature for inaction.

"In ... the last four weeks, instead of negotiating and coming to a budget agreement, they decided to debate and to debate and to have hearings and more debates and more hearings and finger-pointing and assigning blame," Schwarzenegger said.

"At the end of the day, they haven't accomplished anything," he said. "As a matter of fact, what they have accomplished was partial solutions that lack both the necessary cuts and the long-term reforms."

Schwarzenegger again said he will not sign a state budget that does not address the entire $24 billion deficit.
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