Talk to enough veterans of the world of California government and you come to realize that one key element in 'fixing' what ails the state may be trying to untangle the complicated, and often dysfunctional, relationship between cities and counties and the state Capitol.

Again.

Over the last two days on The California Report, we've been examining both the big picture of this relationship, and one of the proposals in this summer's budget talks that would change it.

And here's the bottom line: few disagree that the responsibilities and resources of government services could be better aligned, so that Californians are getting what they want... and when they don't get, know who to blame. But having said that, it's unclear whether the current proposal is enough of a fix... and... whether it can be carefully crafted in the pressure cooker of talks surrounding an overdue budget and a massive state budget problem.

First, some history. In my story that aired this morning, we examined how much of the tangled mess of rules, responsibilities, and revenues date back to -- surprise -- Proposition 13.

Whether you like the landmark initiative or not, one thing everyone agrees on is that state lawmakers rushed to plug the hole in the piggy bank. That meant state dollars replacing local dollars for both social services and for schools.

While the news reports of the time (see the second story in the above video for a specific discussion of post-Prop 13 issues) focused on the immediate cash bailout of local government, more notable in hindsight were the actions to keep money flowing through a but with strings attached -- legislation signed into law in 1979, known as AB 8.

"There was all this 'Oh, we're going to make sure that locals have the opportunity to make decisions,'" recounts Yolo County supervisor Helen Thomson. "Well, what happened is [those decisions] got swooped into Sacramento."

From there, the road is long... and winding. So much so that a much talked-about diagram crafted by the Legislative Analyst's Office on this history is jokingly called 'The Yellow Brick Road' in Capitol circles (see it on page 5 of this PDF document). It includes both highlights and lowlights... from a major transfer of court operations to the state that began in 1988 to the broad 1991 shift of social programs to counties (the one often simply referred to as 'Realignment') and beyond.

The two mentioned above are noteworthy because of the length of time taken to craft them -- months in the case of the 1991 deal (talks that began shortly after former governor Pete Wilson was elected in the fall of 1990), years in the case of the courts.

Finding a deal on this summer's proposal -- a smaller but important discussion of shifting more public safety and social programs -- would have to happen much more quickly. And everyone acknowledges that tight timeline, in the midst of talk of summerlong stalemates and IOUs -- could make it tough to get things right.

"It gets trickier," says Sen. Denise Ducheny (D-Chula Vista). But she also says there's no way around some kind of change if certain programs -- mainly social services -- are to survive. "To completely eliminate them, as the governor seems to want to do, doesn't help either," she says.

And here's where the often discussed issue of rejiggering the state-local relationship always seems to come back... to, surprise, money. This summer's proposal from Senate Democrats hinges on not just sending more control of some programs to locals, but also sending them revenues for those services collected from new taxes -- including a long discussed severance tax on oil drilling. Governor Schwarzenegger opposes the tax hike, says his spokesman, even though he's willing to discuss the idea of realignment.

And to a person, almost every local official I've spoken to is expressing real concern about funding. Yolo supervisor Helen Thomson, who also has a stint serving in the Assembly on her resume, says she's particularly concerned about one idea that $500 million in projected government savings from federal health care reform be counted towards the money for these programs -- a proposal she calls "funny money."

And making it about money -- or more precisely, a lack of money -- is a common theme in the history of reworking the local-state relationship. "Our motivation," says longtime state budget expert Fred Silva, "is 'How does the state save money?' and not 'How can we improve community [services]?'." Silva once joked with state finance officials that the budget staff's motto when it comes to government programs is 'If It Grows, We Don't Want It.'

You're going to hear a lot about money and local government this fall. Six years after voters enacted a constitutional amendment to make it harder for the state to raid local coffers, a seemingly ironclad ban on such transfers is on the ballot as Proposition 22. The 2004 proposal had broad support -- from both statewide officials and representatives of both city and county government. But Prop 22 may split apart some of those groups; supporters say it's a needed protection, while critics warn that fewer budget deficit options in Sacramento could mean more pressures on some of the services used by the most needy Californians.

On Monday, my colleague Sasha Khokha in Fresno took a look at child care services paid for through the welfare-to-work program CalWorks -- one of the programs that could have responsibilities fully shifted to locals under the Senate Democratic proposal. You can hear it below:

And then here's my radio story from this morning on the history -- and the challenges -- of realigning the state-local relationship:

[Note: this two day overview into local-state relationships is part of KQED's ongoing series examining the crisis in governance, which we call 'Governing California: Making Sense of our State of Disarray. You can find more on the project here.]

This posting has been modified to reflect that trial court funding changes began in 1988, and not (as the first version implied) were actually completed in 1988.