Brown's Government Rework Needs Money

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There are few things that could be called simple about Governor Jerry Brown's quest to shift a number of programs from the state to locals, but here's one... and it's a biggie: money.

More specifically: how's it going to be funded?

My overview story on the money question aired on this morning's edition of The California Report (listen above).

And while it was but one of a number of thorny questions that arose on Wednesday during a Senate committee hearing, everyone agrees that this massive shift of programs away from state control cannot happen without a clearly identified -- and dependable -- stream of cash.

The realignment proposal seeks, in its first phase, to hand over control of programs ranging from parole to mental health and beyond -- programs expected to cost almost $6 billion to run in 2011-12.

(Brown's full proposal, plus some helpful history of government realignment, can be found in a PDF breakout from his January 10 budget proposal.)

The governor is pegging the extension of current sales and vehicle tax rates to the funding of these services for the first five years (more on that in a moment). But starting in year six... well, that's where the challenge lies.

At Wednesday's hearing of the newly formed Senate Governance & Finance Committee, Brown's top realignment adviser admitted that the long-term financing is still a work in progress. Diane Cummins, a veteran Capitol budget adviser who actually came out of retirement to help the governor on this plan, told senators that the administration is focusing now on the language of the measure voters would consider in June -- a measure that would, she says, identify the funding plan.

The most likely option discussed at the hearing for long-term funding would be some sort of dedicated stream from the state's general fund. Of course, the general fund is the part of state government that's bleeding red ink. And one wonders whether locking up another part of that fund would, in future tough times, further squeeze other state services.

It's important to again mention that the funding for Brown's realignment proposal is only the most obvious hurdle to overcome. And fast. Perhaps the best part of the Wednesday event came when Marianne O'Malley of the Legislative Analyst's Office offered the senators a list of what they need to do in just the next four weeks to make all of this happen (PDF).

O'Malley suggested that funding decisions be tackled in Week #3, after some more fundamental issues about the state/local shift are settled. As she laid out the huge issues to be tackled -- all in just that one week -- a bit of nervous laughter erupted from the dais.

"This (week #3) is a very difficult week," said O'Malley, herself with a bit of a chuckle about what she was suggesting.

As you probably know, that timeline is being driven by Governor Brown's quest for a June election on the tax revenues. But what's not being talked about quite as much is that the proposal the Legislature would place on the ballot would also include a good bit of the details about the realignment plan. That's because many of these changes, an amendment to the state constitution, will require voter approval.

Can it be done? Certainly no one who's working on the project is saying no, even though they admit that negotiating a workable plan with legislators, counties, and others is not something that normally happens quickly.

But there's also a sense that if this can't be crafted now, some of the programs in question face major cuts.

"If this isn't successful, there is no money," said Sen. Lois Wolk (D-Davis), chair of the committee, after Wednesday's hearing. "It will be a disaster for these very same services come June."

And perhaps that's going to be part of the political calculus in all of this, too. After all, the early funding -- from the taxes -- will require a sales pitch to the public... and supporters may believe that if the voters see the extra tax dollars will go to, say, child welfare services or court security, they'll be more likely to begrudgingly vote yes.

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About John Myers

John Myers is senior editor of KQED's new multimedia California Politics & Government Desk.  He has covered California politics for most of the past two decades -- serving previously as Sacramento bureau chief for KQED News and, most recently, as political editor for KXTV News10 (ABC) in Sacramento. He moderated the only gubernatorial debate of 2014, and was named one of the nation's top statehouse reporters by The Washington Post. Follow him on Twitter @johnmyers.
  • flicka47

    Of course voters may also ask themselves why taxes such as the vehicle tax increase that was supposed to help balance the budget ended up going for a new program rather than pay for the ones we’ve already got…

    Localizing a lot of the functions the State has taken on itself is a great start. But not unless the costs the State is generating with these programs/functions go away.Costs and revenues to support these programs will have to be 99% to the local agencies. If the state gives the operating of the program to the county, then the state has to get out of the business of managing the program. We can only hope that is so, otherwise the state stays and becomes even more “middle management” heavy. That does not reduce costs at all.

  • Rick

    While “the counties assume responsibility for CalWORKs, food stamp administration, and child support.” may save the State some money, it will be hard to devise a methodology which insures that needed services are being delivered. Yes, “The counties already operate these programs for the state.”, but that does not mean that they perform their functions well.

    This should be interesting.

  • bear_in_mind

    Having worked in both the private and public sectors, I can assure you that there’s 10-15 percent of waste regardless of setting simply due to human nature. But with all the public sector reductions that have already taken place, all that’s left to cut now is direct services.

    One thing that government might be able learn from the private sector would be a process akin to the “General Electric (GE) Way,” where the bottom 5 percent of performers annually are offered three months to find another job in the company that’s a better fit, or they can leave for another employer. The process doesn’t eliminate cronyism (that’s an issue of management culture) but it rewards initiative and encourages employees to keep their skills current.

    I think the real elephant in the room is Proposition 13. Californians were sold a vision of nirvana (low taxes = high prosperity) and the bargain paid off most handsomely for the most obscenely wealthy. But for the other 98 percent of Californians, we’ve been offered a plethora of half-measures to cover up the massive structural damage it’s done to state revenues.

    The truth is that if Howard Jarvis and Paul Gann had honestly explained to California voters that their brainchild was going to result in the closing of libraries, parks, fire stations, and destroy the competitiveness of our education system, there’s no way it would have passed. But now we’re unmistakably in a state in decline and apparently the well-heeled are prepared to play class warfare right up to the tipping point.