NEWMAN – Local leaders are keeping close watch on the budget stalemate in Sacramento, hoping that state legislators don’t balance their own finances with deeper cuts to City Hall revenues.

Several different scenarios have emerged, City Manager Michael Holland explained recently, but the city can do little but wait and watch while lawmakers wrangle over the state budget.

“We don’t know what the outcome is going to be,” he commented. “The governor has indicated that he is not interested in balancing the budget using local dollars, but the legislators have not ruled that out. There is also a proposal on the table to take redevelopment agency dollars.”

The city has already absorbed a $170,000 vehicle license fee (VLF) funding cut for the current fiscal year, triggered by a series of economic factors which include declining property taxes statewide.

The city’s own property tax revenues are down sharply this year as well due to the collapse of the housing market, and sales tax is coming down as well, Holland said.

He offered no predictions on when the state budget will be adopted or what the outcome will be.

“I don’t know how close they really are,” the city manager remarked. “We’re just waiting. The state legislature has just one required task a year, which is to adopt a budget. That is their only required action.”

The city has adopted only a preliminary budget for 2008-09.

“We want to see what the state does before we adopt a final budget,” Holland explained. “We will have to resharpen our own budget based on what the state does.”

City Hall is all too familiar with the practice of the state raiding local revenues.

Holland told the council last week that, by his calculation, the state has taken $1.7 million in revenue from the city since 1992.

“That’s a full-time police officer every year,” he pointed out.