January 16, 2003
CONTACT: Deborah Clark (408) 730-7476

City of Sunnyvale Responds to Proposed State Budget Cuts 

Sunnyvale, CA (1/16/03) -- In response to two specific budget changes being recommended by the State of California to reduce its deficit, the City of Sunnyvale has outlined how this will impact the City’s own budget and potentially affect its services.  The Governor of California has proposed transferring the Vehicle License Fee from the cities to the state government, which would eliminate $650 million to cities this year and $1.45 billion for next year.  If this change is implemented, Sunnyvale will lose over $8 million in vehicle license fees this year and next year.

Gov. Davis’ proposal also takes $75 million in redevelopment authority funding allocated to cities this fiscal year and an ongoing shift of $250 million from cities beginning next year.  If this proposed change is implemented, Sunnyvale could lose up to $2.5 million in redevelopment funds over the next two years.

“We understand that the State has a very difficult problem and that there needs to be cuts,” said Sunnyvale Mayor, Julia Miller.  “But we suggest that the State consider alternatives to taking such deep cuts out of cities’ budgets or we stand to have important city services severely impacted.”

“The Vehicle License Fund is legally considered a direct local revenue source and should not be redirected to offset the State’s budget crisis,” said Bob LaSala, Sunnyvale’s City Manager.  “In regards to the redevelopment authority funding also being diverted from city governments, redevelopment agencies are a principal source of public infrastructure improvement and jobs. Our area has been particularly hard hit by job reductions and loss of redevelopment funds will only make it more difficult to recover.”

According to the City Manager, Sunnyvale’s budget system will allow the City to complete this fiscal year without significant changes to current services, projects, and Council-set service levels.  “Because the system requires that we assess both the short-term and long-term affects of policy decisions, we have the lead time needed to address these fiscal issues on a careful, well-thought out basis,” he added.

At this time, the City is examining a range of actions to address these financial issues as they begin to affect the City in 2003/2004 and in future fiscal years.  Among these will be a review of planned equipment replacements, proposed filling of vacancies, and existing program and project priorities.  Changes to existing service levels will be presented to the City Council before actions are implemented.