State Budget: Better, But Worse

From the 1.23.13 edition.

By Daniel Mintz

Press Reporter


Largely thanks to successful tax measures, the state’s income matches its spending but is still falling well short of pre-recession levels.

A lowdown on the state budget and its effects on the county was delivered to the Board of Supervisors at its Jan. 15 meeting by County Administrative Officer Phillip Smith-Hanes. He told supervisors that Governor Jerry Brown’s initial 2013-14 budget proposal, released five days earlier, is at $97.7 billion, a five percent increase from the current fiscal year’s budget.

Brown has reined in the state’s deficit tendencies and even proposes a $1 billion surplus in his budget. But Smith-Hanes put it in perspective.

“It’s worth noting that the revenues, although sufficient to cover expenses for the first time in a number of years, are still $4.1 billion below where they were at the pre-recession peak of 2008,” he said. “So economic recovery is definitely occurring at the state level, though not back to where we were five years ago.”

Smith-Hanes said the surplus is a “wonderful thing” but noted that it’s been created through shifting of funds, including diversion of Highway Users Tax funding, which “is not good for us locally.”

Suspension of state mandates has been an ongoing savings tool. Brown’s new proposal suspends four more of them, removing reimbursements to local governments from the budget, Smith-Hanes added.

Other state budget downsides include continued deferral of court construction funding and a $200 million cut to the court system, starting in the 2014-15 fiscal year. “That is very significant and does not bode well for the courts,” Smith-Hanes said.

Health and Human Services has been an area prone to cuts and Smith-Hanes said there’s a “very concerning statement in the budget” on the financial effects of federal health care reform. He read it aloud: “Implementing federal health care reform will require an assessment of how much funding currently spent by counties should be redirected to pay for the shift in health care costs to the state.”

“We’re not sure exactly what that means but it sure doesn’t sound good,” Smith-Hanes said.

Funding for another year of public safety realignment planning is included but Smith-Hanes said the “flip side” of realignment is that as fewer people are sent to state prisons, the county’s Probation Department is getting far less grant funding for reducing recidivism.

“In fact, the governor, statewide, is cutting those partnership grants by more than two-thirds,” said Smith-Hanes.

There are no further library system cuts but reduced funding levels are maintained and $10 million is proposed to be cut from the state’s disaster assistance program. Smith-Hanes reminded that when the last two local disasters were declared, “The state declined to participate in their share.”

There are also funding restorations and increases in Brown’s budget. Funding for the In-Home Supportive Services program is slated for a 4.9 percent increase, although the county’s contribution to the program is fixed through a “maintenance of effort” requirement and a reduction of recipient hours is proposed even though a lawsuit is seeking to block it.

Prior child support services cuts have been erased and funding is restored there. Smith-Hanes noted that the county’s update of its Housing Element has been “one of the difficult situations that has occurred in our relationship with the state” and reported that the state Department of Housing and Community Development, which certifies housing elements, had been “gutted” by past cuts.

This year, however, Brown proposes to increase its staffing.

And to the chagrin of those who strongly oppose it, staffing for administration of the State Responsibility Area (SRA) property owner fee is funded. The Board of Supervisors “lobbied very hard” against the fee, Smith-Hanes said, and it’s being challenged by a lawsuit from the Howard Jarvis Taxpayers Association.

Supervisor Estelle Fennell said some people have refused to pay the fee and “crossed their fingers and hoped the lawsuit would go forward.” She advised people to pay the fee and include a statement of protest.

Those who rebelled via non-payment are “now getting letters with pretty stiff penalties,” said Fennell.