State Senate leader pitches plan to shift services to counties

With 10 days to go until the new fiscal year and little sign of a budget breakthrough, Senate President Pro Tem Darrell Steinberg (D-Sacramento) announced a plan Monday to get California out of the business of providing billions of dollars worth of public safety, welfare and health services, instead giving counties the money to run those programs.

He pitched the proposal as a way to restore trust in government and help get California “off the deficit roller coaster.”

To pay for the plan, Steinberg would impose a new tax on oil, delay corporate tax breaks and cancel a scheduled cut in the vehicle license fee. In exchange for the money, counties would be on the hook for many services California currently provides.

Those include monitoring juvenile parolees, providing drug rehabilitation treatment for Medi-Cal patients, keeping some low-level criminals in local jails instead of state prisons and providing some services for the elderly. Counties’ share of welfare-to-work programs would grow from 2.5% to 25%.

Steinberg did not detail how much the proposal would save the state; California faces a $19.1-billion deficit.

State and local governments have had strained relations in recent years as Sacramento has looked to either take money from or shift more responsibility to cities and counties.

Ryan Alsop, an assistant chief executive for Los Angeles County, said the restructuring plan “is something that we welcome,” but warned that “any realignment of programs needs to come with long-term sustainable funding.”

That funding — through new taxes — could prove to be a serious obstacle. Republican lawmakers dismissed the plan for raising taxes. A spokesman for Gov. Arnold Schwarzenegger, Aaron McLear, said that the governor was “open to restructuring government” but that relying on increased taxes “would be a mistake.”

The stalemate in Sacramento is so ingrained that the suggestion of crafting a spending plan before the new fiscal year brought laughs at Monday’s news conference. Lawmakers appear resigned to missing the July 1 mark.

“I don’t want to unduly raise expectations,” Steinberg said.

Meanwhile, an alternative budget plan pushed by Assembly Democrats, which relies on $9 billion in borrowing from Wall Street to be repaid with oil taxes, received more bad news Monday.

A legal opinion from the office of Atty. Gen. Jerry Brown said last week that the plan “could be suspect” in court. State Treasurer Bill Lockyer said Monday that without a clear opinion on the legality of the plan he could not move forward with selling the bonds to Wall Street.

“Our role is simple: We get an opinion, we can borrow. We don’t get an opinion, we can’t borrow,” he said.

Shannon Murphy, a spokeswoman for Assembly Speaker John A. Pérez (D-Los Angeles), said Assembly Democrats “remain confident that [our] budget is legally sound.”

shane.goldmacher@latimes.com