“The state is pushing counties to the financial brink,” said Colusa County Supervisor Kim Dolbow Vann. “We can’t survive a delay of payments for state services we are providing on their behalf.”

Vann was one of 250 California county supervisors and administrators gathered Wednesday in Sacramento for the annual California State Association of Counties Legislative Conference. The meeting occurred in the shadow of a proposed May Revise that could take as much as $8 billion from local governments.

The biggest protest was over the proposed state “borrowing” of $2 billion in Prop 1A taxes. It was called a short-term solution to a long-term problem because the funds are required to be repaid in three years with interest. That is the same time newly-enacted taxes will end, leaving the state with no way to meet its obligation.

While CSAC Lobbyist Jean Hurst agreed that the property tax shift was not a solution to the ongoing state revenue problem, she warned members of the CSAC Government Finance and Operations Policy Committee that it was “an accepted fact” among legislators in the Capitol. “The mechanics – possible exemptions – are up for discussion.”

“Borrowing against repayment of those ‘loans’ also may not be a viable option,” Hurst added. The state is notorious for not living up to its promises and the market may not be receptive in the current economic climate.

Hurst further warned counties to brace themselves for a state cash flow crisis this summer that could be four times worse than the one that stopped payments to state programs in February.

“The word ‘dire’ is not appropriately extreme to categorize the situation,” Hurst said.

That leaves local governments facing even more cuts and delayed payments for social services at a time when sales tax revenues and rising caseloads have already taxed counties’ abilities to deliver services.

State Legislative Analyst Mac Taylor and Beacon Economics principal Christopher Thornberg delivered the bad news that revenues were not going to rebound any time soon. “Sales taxes and property taxes could be flat for a long time,” Thornberg said.

“We need to educate legislators on the impact of the totality of the redirections,” said Tulare County Supervisor Steven Worthley.

Proposals in the May revise included eliminating Williamson Act subventions to local agencies on top of existing 10 percent reductions, borrowing gas taxes, redirecting some prisoners to county jails, eliminating mental health managed care for adults, suspending CalWORKs Pay for Performance programs, reducing state child and legal immigrant welfare costs.

According to CSAC estimates if all those cuts, cost shifts and deferrals are enacted, they could equal more than $8 billion in reduced revenues to counties.

Marianne O’Malley, a representative from the Legislative Analyst’s Office counseled that the counties are still in the early, denial stage of grief. “We need to get on with the mourning process and move from anger to solutions stage,” O’Malley said.

Bary Wyatt, CSAC president and Imperial County supervisor, agreed about the need for finding alternatives. “The state and counties are supposed to be partners in delivering services,” Wyatt said. “We accept that there will be painful cuts in social programs, but don’t ‘borrow’ money from the counties. That is a short-term fix that will make the problem worse.” If you are going to cut funding for programs, then cut the level of service expected to match.

After that pep talk, he led the group across the street to the Capitol to deliver the “38 Million Served – Billions at Risk” message to legislators.