NEWS ANALYSIS : Budget ‘Shift’ a Twisted Tale of Fiscal Foes

To hear county supervisors and city council members talk in these dark budget days is to hear a tale that portrays Gov. Pete Wilson as the driver of a runaway Brink’s truck.

With the assistance of strong rhetoric, the local version of the story implies that the governor, himself, would stop in Orange and the other California counties under the cover of darkness, scoop up piles of property tax money and speed back to Sacramento to plug state government’s massive budget shortfall.

It is indeed a story that adds to the political intrigue and one that plays well locally in this season of fiscal blame.

On Tuesday, when Orange County supervisors meet to adopt a preliminary budget for the 1993-94 fiscal year, the discussion is bound to return to how the $80 million in proposed cuts to health care, fire protection and law enforcement service was necessitated by raiders from Sacramento.

Those numbers could rise dramatically as early as tonight when the Legislature meets to consider a plan that could shift more than $120 million from the county’s treasury.

Among the $80 million in cuts already proposed is a reduction of library hours by 44%, the closure of two fire stations and the loss of at least 450 county jobs.

But this long-running story has lost some crucial elements in months of translation, as if passed in conversation down a large family’s dinner table.

What is true is that Wilson and the Legislature are considering plans that would take millions in local property tax revenue from the county to help the state meet its obligation to fund the California public school system.

Commonly referred to as the “shift,” the county and its board-governed special districts--under the most conservative of plans--would transfer about $60 million to the public school system.

Contrary to the tales that would have villainous state officials using the county’s cash to pay for programs in Ojai or Norwalk, none of it would ever leave Orange County. All of the money, according to the budget plans under consideration, would finance local public school programs.

Yet, it is an element of an incredibly confusing system that tends to be among the least understood by residents whose tax money is doing the moving, state and county officials say.

In the simplest of terms, the various funding formulas have reduced government budget-balancing to a shell game, with the governor and the Legislature making the rules.

“I don’t think people understand the complexity in how all this works,” Supervisor William G. Steiner said. “I think the public believes that the money goes up to Sacramento and never comes back to fund local services.”

The reality of the system, though, provides little comfort for politicians like Steiner, who now must persuade state government to free more cash for jails, health care and firefighting at the possible expense of the local education system.

The politics of such a choice, while at a boiling point in Sacramento, have yet to be fully played out in Orange County beyond the offices of elected officials.

This past week, the supervisors and Sheriff Brad Gates continued to tar the governor for favoring the use of county revenue to meet the state’s school funding obligation. The board even passed a resolution, joining a growing list of dissenting counties, asking that Wilson’s proposal be ignored.

But not a single resident, for example, showed up at a recent budget hearing to protest a plan that would shut down the James A. Musick Branch Jail in Irvine, a proposal made necessary by the planned revenue shift.

“The average citizen really doesn’t believe that public safety is going to be reduced,” Steiner said. “Because it is such a basic quality of life, there is some sort of complacency.

“People feel no jeopardy to police and fire services. If it comes to pass and those services truly were cut, we’ll hear an outcry like we’ve never heard before.”

William Hodge, executive director of the League of California Cities’ Orange County division, said that while some may see the budget “shift” to schools as a simple “rearranging of the deck chairs,” he believes the state is effectively abandoning its constitutional duty to fund the school system with its own resources.

“The thing is like a black hole, and we’re all getting sucked into it,” Hodge said of the loss to local governments. “It’s an insider’s game. . . . Honestly, I don’t think there is a deep understanding (among the public) about the process.”

Much of the confusion, county Budget Director Ronald S. Rubino said, can be traced to the passage of California’s landmark Proposition 13, which effectively capped property tax rates and shifted fiscal powers from the local governments to the state.

That policy, Rubino said, has paralyzed local governments, leaving critical funding decisions in the hands of officials hundreds of miles away in Sacramento.

“We’ve lost control of local government,” Rubino said. “All the decisions are really being made in Sacramento. You can write letters and send faxes.”

Meanwhile, Steiner believes that Wilson should be fully aware of the political ramifications his budget plan could bring.

“The constituency group of those involved with schools is much smaller than that of local government,” Steiner said, wading into what could be a politically risky debate. “Local government affects just about everybody. But only a quarter of the voters have kids in schools.”