July 22, 2009 9:55 pm

California counties vow to sue over cuts

Cities and counties across California are preparing to sue the US state to stop their funds being used to close a $26.3bn deficit, saying the move will weaken essential public services and deepen the impact of the recession.

Arnold Schwarzenegger, the governor of California, reached agreement with the state government this week on a new budget deal that cuts $15bn (€10.5bn, £9.1bn) in spending from public programmes, such as healthcare and education.

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The deal also includes a measure that diverts to state coffers $4.7bn of funds earmarked for cities and counties.

This has sparked an angry response from local governments struggling to address their own deficits. In Los Angeles, California’s most populous county with more than 10m residents, state officials plan to divert road taxes and funds ­earmarked for city redevelopment.

“For the state to balance its budget on the backs of the state residents most in need of help . . . is fiscally reckless and morally bankrupt,” said the Los Angeles county board of supervisors in a statement. “Taking advantage of counties that serve the elderly, ill, mentally ill, disabled and the impoverished is wrong on its face, and it is illegal.”

Elsewhere in the state, members of a public workers’ union are being balloted on whether to strike. The California branch of the Service Employees International Union, which represents more than 95,000 state workers, has asked members to authorise “concerted job actions ... up to, and including, a strike”.

The union represents a range of public employees, including clerical workers, auditors, information technology professionals, teachers, librarians and nurses.

“The ballot is a reaction to what Schwarzenegger has been doing to us for the past year,” said Jim Zamora, a union official.

Members of the union have in the past few months absorbed two days per month of unpaid leave: the new budget deal will see them take a third day off, equivalent to a near 15 per cent pay cut. Mr Zamora said the third day was a “a tipping point”.

“The governor has talked about shared sacrifice but this is not shared sacrifice. The oil companies are not sharing this – they got new drilling rights off the coast of Santa Barbara and had massive profits last year.” He said the governor had shown public workers “unrelenting hostility”.

The provisional budget deal includes the new rights for drilling off Santa Barbara, which has angered residents and environmentalists. The area was the scene of a large oil spill in 1969 when drilling caused a rupture of the seabed, releasing 200,000 gallons of crude. Richard Nixon, then president, said the Santa Barbara incident had “touched the conscience of the American people”. This led to the birth of the US environmental movement and laws restricting offshore drilling in California.

But with the state desperate for revenue and Mr Schwarzenegger keen to avoid tax increases, the state has chosen this option. There were also protests over a decision to raise California State University student fees by 20 per cent, only months after trustees had approved a 10 per cent increase. CSU is known as the “People’s University” because it attracts a large number of students from poorer backgrounds.

The move is part of a plan to close a $584m budget gap, exacerbated by a drop in state funding. “We face a huge economic tsunami,” said Jeffrey Bleich, chairman of the trustees. “What we’re doing today doesn’t give anyone pleasure.”

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