On his first day in office, California Governor Jerry Brown did something nobody can remember a sitting governor doing: He stopped by the offices of the association for California's counties. He came to win over the counties on his plans to hand them many responsibilities long handled by the state. In exchange for more duties, Brown proposed giving counties more flexibility and the promise of steady, reliable funding.
It would be a reversal in direction from Brown's last stint as governor — three decades ago — when the state added to its burden by promising to pick up more of the tab for schools that otherwise faced cuts because of voter-enacted curbs on local property taxes. Since then, Brown has become quite familiar with the ins and outs of local government, most notably by spending eight years as mayor of Oakland.
Now, though, the state of California is in famously bad shape. Year after year, budget deficits emerge that are so big they would eclipse the total budgets of most states. Like local governments before it, California's state government is severely limited in its options for bringing in more money, as voter-imposed restrictions make it difficult to raise fees and taxes. The state needs an out or, likely, many of them. Local governments seem to be first on the list.
"My proposed restructuring will return decisions and authority — as much as possible — to cities and counties and schools," Brown told reporters in Sacramento. "And in that way, there will be greater accountability, transparency and, hopefully, citizen participation, because government will be closer to the people."
Although Brown's proposals are the most far-reaching in the country, California is not alone in looking to locals to take on more duties. The governors of Nevada and Washington, too, are trying to push state tasks to counties and regional authorities. All face significant resistance. Localities, after all, are dealing with serious revenue problems of their own. Many states have made those problems worse, with 20 of them in the last two years reducing aid to localities, according to the National Association of State Budget Officers .
The governors of Nevada and Washington also want to move some current state duties to local jurisdictions.
Washington Governor Chris Gregoire, a Democrat, faces stiff resistance to her plan to have regional authorities take over the state's ferry system. A decade after voters repealed a major source of funding for the ferries, Gregoire says the state cannot afford to operate the system any more. Instead, she wants to create a regional authority that would have taxing authority. The state would still provide subsidies.
"Rather than patch together funding for the ferries for another two years and subject ferry riders and communities to more uncertainty, I believe it is time to take bold action so the system is sustainable, safe and accessible," Gregoire said in a statement .
Even before Brian Sandoval became Nevada's governor this month, the state took money from local governments to shore up its own finances. Now, the Republican Sandoval is proposing further raids on local funds, while also planning to shift responsibility for many services to localities, particularly in the areas of public safety and human services.
"We identified over $100 million in state spending for what are essentially local programs. The state can no longer afford to pick up this tab, so some of these responsibilities must be transferred to the local level," Sandoval explained in his state of the state speech .
- Daniel C. Vock
In many ways, California seems like a natural place for an overhaul. Its counties already administer most state programs to the public, with motor vehicles being one notable exception. Nine of its counties have more than a million residents, and 70 percent of state residents live in those counties.
Brown's budget outline calls for shifting some $10 billion worth of services, putting locals in charge of activities such as firefighting in urban areas, securing courthouses, handling criminals charged with minor crimes and providing mental health treatment. In the meantime, the state would take over many duties associated with the new federal health care law.
Paul McIntosh, executive director of the California State Association of Counties, says counties are generally receptive to Brown's proposals. Many of them, particularly those dealing with human services and criminal justice, would allow counties to better integrate services. McIntosh says localities are in a better position than the state to keep people out of jail by combining treatment for drug and alcohol addiction, mental health programs, education and job training.
"We know the people," McIntosh explains. "They come through our system to begin with. They're known to our probation departments. They're known to our sheriffs. We know, particularly, what types of services the community needs more. That's why we want that flexibility, because what works in a small county in northern California may not work in Los Angeles."
Still, counties will need help with the transition. For example, most currently do not have enough space in their jails for an influx of low-level offenders or the technology to keep an eye on them once they are released from jail confinement. Counties may be able to use home detention or GPS monitoring, but even those solutions require extra staff.
Of course, that means more money. Brown wants to extend, for another five years, a temporary sales tax increase and vehicle fee increases that would otherwise expire this year. Doing so would require voter approval, most likely in a special election Brown wants to hold this spring. It would help the state dedicate an additional $6 billion to the counties, but funding after that is unclear.
The counties learned valuable lessons from a realignment carried out by the state in 1991. Under then-Governor Pete Wilson, a Republican, the state shifted responsibility to the counties for in-home health care. After that, though, the federal government expanded the mandated scope of the program, leaving counties on the hook for more costs than they anticipated. If the state again devolves duties onto counties, McIntosh says, the counties want protection in case the programs they take on are expanded, too.
On top of changing the relationship between the state and localities, Brown wants to change the relationships of local governments with each other.
The most controversial part of Brown's outline deals with how property tax revenue is split among local governments. Brown wants to abolish local redevelopment agencies, grab the money those agencies now spend, and give it back to localities to devote to "core" programs such as schools and other essential services. But that has caused an uproar among cities, which say they need the redevelopment agencies to lure new investments to their areas.
"His proposal to abolish redevelopment agencies isn't a budget cut. It's a call for extermination of the state's only real jobs program," said Chris McKenzie, executive director of the California League of Cities, in a statement after Brown addressed the league.
It is lost on no one, especially the governor, that Brown himself has benefited greatly from the redevelopment agencies. He lives in a loft built through the use of one such agency and, as Oakland's mayor, used redevelopment funds to accomplish one of his signature achievements, the rehabilitation of the Fox Theater. "I'm sure glad I got it built before this damn budget came out," Brown told the gathering of city leaders.
But Brown's state Finance Department now argues that there is little evidence the redevelopment efforts attract businesses from outside the state, rather than from elsewhere in California. And they come at a cost to other local governments and the state. The redevelopment agencies siphon off new property tax money that comes in when a neighborhood improves. They get the extra taxes generated when a refurbished theater revives downtown Oakland or when a corporate headquarters improves downtown San Jose.
All told, the Finance Department says, the redevelopment agencies collect $5 billion that would otherwise go to other local governments, but they pass along only $1.1 billion to pay for such things as police, fire fighters, road maintenance, parks and libraries. Meanwhile, the diversions mean the state must pay local schools $1.8 billion to meet minimum funding commitments.
That is why Brown has proposed abolishing the redevelopment agencies by July. The state would collect a net of $1.9 billion to use for Medicaid and trial courts. Localities that want to launch new economic development efforts would have to do so through voter referendums.
Of course, many of Brown's ideas — including extending the tax hikes and abolishing redevelopment agencies — require voter approval. And that is only if the Legislature signs off on them first.
The ideas themselves are not new. California state senator Darrell Steinberg proposed similar changes last year. But that was before anyone knew who the next governor would be, much less whether he or she would support the shuffling of duties.
"Now we have a new governor," says McIntosh, from the county association. "He has a four-year term in front of him. He obviously has buy-in. He already has made additions to his staff specifically to work with us with realignment and restructuring. So we know he's serious."