Spend It If You Got It

Yes, I know, a budget surplus is still a surplus (except of course if you a "Republican" Governor and you don't know what the word budget surplus means).

Months ago, the City of Newport Beach passed its new budget with a projected $2.5 million dollar surplus.

It anticipates a 9% in increased revenue from the previous year, so what does this "Republican" City Council do?

Yep, increase expenditures by 9%.

But still it's a surplus, and our "Republican" council members Mike Henn, Keith Curry and Leslie Daigle promise a reining in of spending...

Not in the same league as Democrat-led Irvine, who is expecting a whopping $9.3 million dollar surplus.

But what's in a Party Affiliation title right?

The reason I bring this up almost 6 months after the budget passes is because all of a sudden, a $2.5 million dollar surplus almost doesn't seem high enough anymore.

Consider all the "press-fueled" doomsday scenarios regarding dropping Property values and foreclosures and all the mortgage-industry related layoffs.

While a majority of Newport Beach may avoid the brunt of this, unlike parts of Irvine, there is still Proposition 8 to deal with, which effectively says:

"that California property tax law provides that your current year's assessment on any particular piece of real property is limited to the lesser of the Proposition 13 base year value or the current (January 1) fair market value, sometimes called the "Proposition 8 value."

or in simpler terms:

"Proposition 8 reductions are temporary reductions which recognize the fact that the current market value of a property has fallen below it's current factored Proposition 13 base year value."

Sacramento homes have seen one of every nine property tax bills getting reduced because of Prop 8.

How does this affect Newport Beach?

In the current 2007/2008 Budget, the City is anticipating $51,480,000 in secured property taxes in it's anticipated $146,964,943 in general fund revenue (35%) or out of it's anticipated $195,753,056 (less internal premiums) in Total City Revenue (26%)

This means that if our Newport Beach homeowners use Proposition 8 relief, their property tax bills would drop, which means less property tax income to the City.

But without busting out my spreadsheets and calculators, I can't tell how how much that would affect our total Revenue.

It just sounds logical and a good reason to build a bigger surplus right?

Now, to the point.

The City of Newport is going to spend lots of money in the upcoming year that may or may not have been anticipated in it's 2007-2008 budget:

1. $18 million dollar back bay dredging that the Feds might not cough up for.
2. City Hall in the Park Special Election
3. Lawsuit by Angry Residents
4. Lawsuit by "Discriminated" against Sober Living/Rehab Homes
5. Paying for all the Attorneys (especially to do the work our $1 million dollar City Attorney's office passes on) - I wonder how much James Markman and Richards, Watson & Gerson's bill will be for all his work on the Rehab Home Ordinance.

Please feel free to add to my list.

Question for Assemblyman DeVore (who reads this hogwash sometimes) - Can the State come and raid the City's coffers if (when) they run out of money again?

Good thing the Irvine Company is paying up to Irvine-Company-afy Newport Center huh?

All of a sudden $2.5 million doesn't look that big...