Representatives from California cities, counties and special districts met with Gov. Arnold Schwarzenegger last week during the League of California Cities legislative meeting in Sacramento. The group agreed to the governor’s proposal to shift more than $2 billion in local revenue to the state in exchange for the governor’s support of an initiative that would guarantee constitutional protection for those funding sources in the future.

Simi Valley City Manager Mike Sedell said that under the governor’s plan, his city stands to lose $2.2 million in revenue, but is likely to gain most of it back beginning in 2006.

"Local government is the state’s piggy bank, and they kept breaking it," Sedell said, referring to the state’s historical tendency to divert funds from the cities and counties.

Under the compromise, $1.3 billion per year for the next two years will go to the state. In exchange, the state will repay the money it borrows from the cities, such as vehicle licensing fees. Moreover, the state promises to pay for programs it mandates, or else allow the programs to cease.

In the past, state reimbursements were suspended even though the municipalities were required to provide the programs.

"I think it’s a good deal for the city," Sedell said. " . . . It provides financial security for the city’s future."

Councilman Glen Becerra said Schwarzenegger is committed to protecting the cities’ revenue sources. He said the governor has crafted an initiative for the November ballot that, if passed, will give cities a constitutional guarantee that their revenue won’t be diverted to Sacramento.

"Beforehand, we were taken for granted," Becerra said. "We were assumed to take whatever the state threw at us."

He said the goal in accepting the governor’s plan is to protect those funds that give local residents the quality of life they deserve.

"I think [the governor is] absolutely committed to protecting local government, which provides basic local services," Becerra said.