State Challenged on Tax Collections

An organization that cares for 5,000 retarded people in San Diego County on Wednesday challenged the state’s authority to collect taxes during the budget impasse that has frozen 80% of the group’s funding.

The Assn. for Retarded Citizens of San Diego, the largest organization of its kind in the country, has had to borrow $1 million since the start of the fiscal year, July 1, to meet expenses. The group has an annual budget of $20 million and employs 650 full- and part-time staff members.

Like many organizations in California that provide services to the mentally and physically disabled, the association has received no money from the state for almost two months and is paying interest on loans to meet its twice-monthly $500,000 payroll.

Richard B. Farmer, the association’s executive director, said Wednesday that he was forced to take legal action after a recent U.S. 9th Circuit Court of Appeals ruling stopped Medi-Cal payments, thus ending even the IOUs he was getting.