• Why Some Cities Have to Pay More to the State


    SGV – Recently, a list came out showing how much money cities had to pay to the bankrupt state of California.

    Some cities had to pay millions, even tens of millions of dollars. But some cities had to pay nothing at all. Seems odd, right? How does the city of L.A. have to pay almost $52 million and the city of Arcadia have to pay $0.00?

    Believe it or not this has less to do with fairness or intelligence on the part of cities as it does with the broken state of the economy. The bottom line is that all cities are having to comply with a liquidation of a tremendous amount of assets and that monies that had been in the hands of cities are now in the hands of the state.

    The $6.2 million owed by Industry and the $12.6 million by Santa Monica reflect partial amounts those particular cities have to pay, based on the difference between the loans they received and the tax increment income they doled out to cover their expenses. The problem is, those and other cities will likely need that money to pay off expenses they accumulate during the next six months of 2012. In other words, the state has taken away monies the cities normally use to pay off their bills. And this is just the beginning.

    This is one reason why many cities have filed a lawsuit recently to sue the state of California in an effort to reclaim tax dollars.

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