Obscure Budget Twist Leaves Mammoth Lakes Short of Cash

So far the Town of Mammoth stands alone, stuck in a unique accounting situation that is expected to leave the town $1 million more short this year.

In a bad budget year that has already led town officials to eliminate positions and to give employees one unpaid day off a month, a twist in the convoluted State budget system has left the Town of Mammoth to face another budget cut.

Town Manager Rob Clark explained that in past years when the state was having trouble balancing the budget, state officials took sales tax and vehicle license money away from the cities. The state in turn pays the cities back some of the money by allowing the counties to pay cities money out of a pot of cash used to fund local schools called the Education Revenue Augmentation Fund or ERAF.

This is where the school money comes in. When schools districts can get more money from property taxes then they would from the state, the schools get funded by a mechanism called Basic Aid. With high property values in Mammoth, this year Mono Schools are among the very few in California to have enough local property tax to qualify for this type of state funding.

The short of it- state money that would normally be taken from the state school fund to pay to the cities for lost sales tax and license fees wont be coming in this year. Rob Clark explained that so far, the Town of Mammoth is the only city in the state of California to take this budget hit.

Adding to the intriguing accounting mess is the fact that this shift in school funding means that the County doesnt have to pay property tax into the ERAF education money pot this year leading to a $2.5 million dollar budget surplus for Mono County government.

With the extra County property tax revenue due in large part to the recently ballooning real estate values in Mammoth, we asked if the County could just write the Town of Mammoth a check? Rob Clark explained that there is a different rule related to proposition 13 known as the Gann Limit that sets spending caps for public entities.

Both county and town officials are trying to work together to solve this convoluted funding problem. Ideas for a possible solution are on the agenda for the special meeting of the Mono Supervisors in Mammoth Tuesday night. This special meeting of the Mono Supervisors starts at 6:00 pm in the Social Services Conference Room on the second floor of the Sierra Center Mall in Mammoth.

 
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