Arcadia City Manager Bill Kelly is skeptical about the way the State of California balanced this year's budget. The State promises to pay cities back for sales tax to be used to pay off $10.7 billion in loans. The maneuver, known as the "triple flip" will take half of the cities' sales tax revenue for the next five years, and pay it back out of property taxes now earmarked for schools. Arcadia will lose 25% of its vehicle license fee reimbursement, around $750,000. Arcadia is in good shape this year and next, primarily because of a healthy reserve fund. After 2004-2005, unless some solutions are in place, the city could face some hard times.
Budget cuts have caused the Arcadia Unified School District to rely on the Arcadia Educational Foundation to provide summer classes from sports to cooking and English and Math.
California Governor Arnold Schwarzenegger proposed a $125.6 billion budget for 2006-2007. He plans to increase spending on education and transportation and cut funding for some welfare and health programs, while not increasing taxes. Arcadia Mayor John Wuo agrees that California needs to make substantial investments in the state infrastructure.
Governor Arnold Schwarzenegger has proposed taking 8% of the property tax that cities receive. That would mean a loss of $1,202,358 for Arcadia. A chart shows how much other local cities may lose.
Hundreds of teachers across the San Gabriel Valley are facing layoffs again this summer and experts say cuts could be far more drastic if a solution to the state's budget problems is not reached. About 20,000 teachers in the state have been put on notice that they could be laid off if school districts do not receive the necessary state funding. Arcadia Unified School District (AUSD) sent out notices to about 16% of its teachers.
Senator Bob Margett told Arcadia City Council that California is facing a $15 billion deficit in the 2003-2004 fiscal year and cities could be targeted for revenue transfers.
Since state lawmakers have reached a budget deal. West San Gabriel Valley cities will receive monies to be used for road repairs and transit improvements. Arcadia will receive $237,931 in 2005-2006. In the past two years, these funds were withheld by the state to cover budget shortfalls.
The state's budget crisis could mean that Arcadia Unified School District will suffer a shortfall of an estimated $2.3 million in the 2008-2009 fiscal year. Figures for other local school districts are included.