While perhaps not an unexpected end to the state budget debacle of 2010, Governor Schwarzenegger finalized actions on the 2010-11 state budget last night. Regrettably, the Governor let down California’s counties by vetoing SB 866. Senate Bill 866 would have enabled counties (and cities and special districts) to securitize the nearly $1 billion in pre-2004 mandate claims that the state owes to those entities. (Remember in the early 2000s, when local governments were provided mandated services with deferred reimbursement? That tab still hasn’t been paid and is growing due to accruing interest.)
Sound familiar? It should. It’s the same story for CalWORKs Stage 3 childcare elimination, the $80 million reduction to child welfare services, and the elimination of funding for AB 3632 (mental health services for special education students). While the Pro Tem and Speaker have vowed to restore this funding when a new Administration is in place, in the meantime, counties will have the unfortunate responsibility of managing the ramifications of the Governor’s actions face-to-face with the real people affected by these cuts.
Everyone gets how difficult the state’s budget situation is and how the political dynamic in the Capitol does not necessarily lend itself to responsible compromise. But a record-breaking budget delay, nothing but budget deficits for the near-future according to Moody’s Investors Service, an over-reliance on internal and external debt (according to State Treasurer Bill Lockyer, California now has the second-highest debt load among large states), and destabilization of core safety net services for vulnerable children have set our state further down the path of miserable mediocrity.
Shameful.
While the state is currently obligated to pay these costs by 2020-21, SB 866 would have given counties the option of selling those eventual payments at a discount today. These funds are desperately needed by counties and could have been used to supplement already depleted local budgets or to provide one-time capital boosts to their communities. Either way, these funds would have saved or created jobs – good, strong, local jobs throughout the state. Since budget discussions take place behind closed doors, we can’t be certain that the mandate securitization proposal is something the Governor had agreed to as part of the budget, but since it was one of the trailer bills to that budget one must presume he had knowledge of the bill and, at least by agreeing with legislative leadership on a budget, gave his tacit approval of the approach.
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