The rumors have been flying for weeks… that lawmakers might borrow from certain funds earmarked for local government. The threat prompted incoming League of California Cities President and Sacramento Mayor Heather Fargo to meet with the Governor.  She says a raid would devastate local services.

“Those cuts would be in police and fire and parks and libraries and everything else we do…” 

Governor Schwarzenegger weighed in on the rumors at an event in Los Angeles. He said borrowing will make things worse long term.

“This is why I’m urging them to solve the problem to first of all not take money from local government, not to take money from transportation not to just fix things temporarily.”

Democrats and Republicans remain at odds over how to balance the state budget. Legislative leaders have acknowledged the borrowing idea has been discussed but say publicly they don’t favor it.