County tells state to reform, not borrow

In response to Governor Arnold Schwarzenegger’s proposal to shift money from counties, cities and special districts to the state, the San Diego County Board of Supervisors called a special meeting for June 3 at which they unanimously passed a resolution asking the governor and state legislature to reject such a proposal.

The resolution also calls for a comprehensive overhaul of the state budget to align state expenditures with revenues and to structurally balance the budget. The county’s chief administrative officer was directed to prepare a letter to San Diego County’s state legislators to request specific plans to address the state’s structural budget deficit as well as noting the supervisors’ opposition to the governor’s proposal.

“The budget proposal is filled with desperate proposals,” said board Chairman and District 2 Supervisor Dianne Jacob.  “Borrowing from local government does nothing to solve the present state budget problems.”

Schwarzenegger’s proposal was made shortly after the May 19 special election in which the state’s voters rejected the governor’s propositions to extend the tax increases intended to balance this year’s budget and to amend previously approved ballot measures so that funding for those programs could be shifted to the general fund.  

“The voters sent a clear message that day that they want a permanent fix,” said county Chief Administrative Officer Walt Ekard.

“The voters did not send a message to Sacramento to say ‘take our dollars’,” said Supervisor Pam Slater-Price.

The governor’s proposals also include cutting the state’s CalWorks program to find jobs for the unemployed as well as cutting funds from the California Department of Forestry and Fire Protection and the California Emergency Management Agency.

“These proposals are quite frankly shocking,” Ekard said.

Despite the governor’s plans to reduce local government income, which would adversely impact local law enforcement and other public safety programs, Schwarzenegger’s proposal includes releasing tens of thousands of state prison inmates.

“We are still trying to get our arms around the magnitude of what is being proposed,” Ekard said.

In November 2004 the state’s voters passed Proposition 1A, which prevents the state from shifting local government revenues for state use. Proposition 1A can be suspended if the governor declares a fiscal emergency and a two-thirds vote of the state legislature suspends the local government protection.

The $2.2 billion shift being discussed at the state level would cost the County of San Diego $70 million. Proposals also include suspending Proposition 42 and Highway User Tax Act funding for local governments.  

“Such an action would truly have a catastrophic effect on the county’s ability to provide even the most basic services,” Ekard said.

Ekard noted that, while proposals have included increasing taxes and shifting revenue from local governments, no serious discussion of structural reform has taken place at the state level.  

“The impact to our citizens of the state incompetence is bad enough,” Ekard said.

Ekard suggested more flexibility for local governments implementing state-mandated programs as well as a state version of the county’s Business Process Reengineering initiative.  

“We are in this mess today because of the state’s unwillingness to cut anything,” Ekard said. “Major reform in the state is imperative, and it’s time that the governor and legislators step up and do what we hired them to do—lead.”

The state’s budget crisis of the early 1990s led to the 1992 implementation of the Educational Revenue Augmentation Fund, in which the state took money from cities, counties and special districts—including Ramona Munidipal Water District—to cover education funding.  

“They still owe us upward of $100 million,” said Supervisor Greg Cox.  “This is just another opportunity for them to come in and raid our tax dollars once again.”

Cox was elected to the Chula Vista City Council in 1976, served an additional two terms as Chula Vista’s mayor and was appointed to fill the Board of Supervisors vacancy after Brian Bilbray’s November 1994 election to Congress. He was on the Chula Vista City Council when the Proposition 13 tax cut of 1978 forced local governments to deal with the corresponding revenue decreases, and he was the city’s mayor during the recession of the early 1980s.

“When you find yourself in a hole, the first thing you should do is stop digging,” Cox said of the state’s spending. “Who knows what the real costs will be to the County of San Diego and every county in California.”

The proposed $70 million shift is only for funds shifted from the County of San Diego.  

“We’re also talking about cities and we’re talking about fire districts,” Jacob said.

(Special districts also include water districts, cemetery districts and hospital districts, which have a greater ability than fire districts to recover shifted costs through increased fees. Special districts also include County Service Areas and Community Services Districts for roads, parks, sanitation and other functions. Resource conservation districts are also special districts, and countywide special districts include the San Diego County Flood Control District and the San Diego Air Pollution Control District.)

“The level of services will go way down,” said Supervisor Bill Horn. “We can’t carry the burden.”

Horn offered several suggestions to the state for structural reform, including replacing 22,000 California Department of Transportation engineers with private-sector contractors, privatizing Department of Motor Vehicles services similar to how the Automobile Club of America now enables members to register vehicles at AAA offices, and contractual agreements with Mexican prisons to incarcerate felons who were in the United States illegally.

   
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