Senate Democrats Pitch Major Changes in State County Roles

Counties would be given a bigger share of responsibility for California’s welfare system as well as some public safety, drug treatment and elderly care programs currently run by the state under a budget plan proposed June 21 by Senate Democrats.

The plan, which would impose nearly $4.3 billion in current state costs on counties over four years, proposes covering the new county obligations through a combination of tax increases including a new tax on oil extraction and postponing the effective date of two tax breaks benefiting mainly large corporations approved as part of the 2009 budget compromise.

“No budget plan on the table today addresses California’s lingering, long-term deficit,” said Senate president Pro tempore Darrell Steinberg, a Sacramento Democrat, in announcing the plan on June 21.

“Our restructuring proposal is not a panacea. But it begins to think and act in California’s long-term interest.”

Steinberg said he didn’t have an exact amount of savings the proposal would generate for the fiscal year beginning July 1 but said the restructuring proposal was designed to close the final $2 billion hole in the Senate’s budget plan.

It’s unclear what the future of the program shift, often called “realignment,” is.

Republicans, both in the Senate and the Assembly, have vowed to back no spending plan containing tax increases. Included in their definition of tax increases is postponing the effective date of the two tax breaks in the Senate Democrats’ plan.

“Raising taxes to pay for the shift of programs isn’t shrinking government, it’s just avoiding the inevitable: state government has to get smaller and more efficient,” Senate GOP Leader Dennis Hollingsworth of Murrieta.

Gov. Arnold Schwarzenegger has also said he won’t sign a budget with tax increases and, like Republican lawmakers, considering postponement of the tax breaks, which will eventually cost the state’s nearly $900 million annually, to be a tax increase.

“We’re open to restructuring government and will have a serious debate about the proposal but increasing taxes and discouraging private sector growth would be a mistake,” said Aaron McLear, Schwarzenegger’s press secretary.

“We’re also encouraged that Senator Steinberg agrees that we need to consider long-term fixes, which is why budget, tax, and pension reform must be part of any solution.”

County representatives hold the opposite view of the GOP governor and Republican lawmakers. Any restructuring plan must contain a “viable, stable and ongoing funding stream,” the counties said in a statement.

Yolo County Supervisor Mike McGowan said the governor’s budget proposal “exacerbates our problems,” shifting as much as $4 billion in additional costs to counties, according to estimates by the California State Association of Counties.

Steinberg’s proposal is the start of a “long-overdue discussion,” McGowan said.

With the start of the new fiscal year less than 10 days away it’s unlikely such a sweeping plan will be completed before July 1.

The last major shift in state and local responsibility occurred in 1991 focusing mainly on the transfer of mental health and social services programs to counties. Generally, it worked well although over the past two decades some of the programs have been expanded by the state without additional revenue to cover the added expense.

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