O.C. to Get Back Funds, Control Under Proposal

For the first time in three years, the release of the state budget proposal did not produce an immediate cry of fiscal distress from Orange County leaders.

Rather, an unusual atmosphere of encouragement greeted the release Friday of Gov. Pete Wilson’s plan to give local governments more authority and money to manage critical services.

At the root of this optimism is a budget plan that would actually transfer $1.1 billion in local property taxes back to the counties, a stark reversal in policy and fortunes from previous years.

The state would also pick up a larger share of funding for trial courts, about $387 million more statewide, under Wilson’s plan.

In return for the promise of more financial support, the governor is asking local governments to take on more responsibility in managing an array of social service programs, from welfare to child foster care.

“Just the fact that the state is not proposing a tax shift from the counties is a major victory,” County Administrative Officer Ernie Schneider said Friday after returning from a late-night briefing at the governor’s office.

“I can’t predict what the Legislature is going to do, but the governor is out of the gate with us. The practice of balancing the budget on the backs of the counties can’t go on. There just isn’t any (money) left.”

Praise for the governor’s plan was more mixed among local educators and students.

Although Wilson has promised to give public schools enough money to keep pace with enrollments, a proposal to increase student fees at community colleges and state universities was not winning many plaudits.

“The fees have more than doubled since I started back to college as a returning student two years ago,” said Jan Clutter, a 51-year-old single mother and Orange Coast College student.

“The increase in the fees twice in the last two years has made financial aid even more crucial. If (Wilson is) intent on increasing the fees, he’s got to find some way to increase grants, scholarships and financial aid.”

Added Jerry Keating, spokesman for Cal State Fullerton: “About all we can say at the moment is the budget clearly portends another lean year for the university and yet another round of student fee increases.

“However, given the slowness of the recovery of California’s economy, we are thankful for what the governor has proposed.”

But local government leaders were expressing the most relief.

Orange County Board of Supervisors Chairman Harriett M. Wieder noted that Wilson’s promises for counties and cities fall in an election year when the governor will be looking for support from all quarters.

“I think the timing is great,” Wieder said. “People don’t like the status quo. People don’t like the way government runs right now. I’m glad the governor is moving to give us more responsibility for program management, but they have to give us the money too.”

The Wilson plan is based on a general restructuring of how basic services are delivered.

For counties, the state is proposing that local governments assume more management and operational responsibility for indigent health care, mental health services, alcohol and drug programs, in-home support services and child foster care.

A key to that offer, however, is the governor’s promise to provide $2.8 billion to counties to fund those new responsibilities. About $350 million of that total would pay for local job retraining programs.

Another $741 million would be distributed to local governments to pay for costs associated with the remaining social service programs.

Officials said Friday that it was too early to know how much of the funding would flow directly to Orange County.

“For the first time, it looks like we’re not going to have to bail out the state,” Schneider said. “All in all, the news is pretty favorable.”

But the scenario painted by Wilson’s budget depends on the state receiving federal grants to fund those social services and a Legislature sympathetic to years of budget hardship in counties and cities.

Friday, members of the Orange County state legislative delegation quickly pledged their support for Wilson’s plan.

“The opportunity is there and the challenge is on the Legislature to make this a reality,” state Sen. Marian Bergeson (R-Newport Beach) told supervisors at a briefing Friday. “It is a bold plan that has tremendous merit in giving more authority to local governments. It’s probably the most dramatic change in government structure since I’ve been in the Legislature.”

Bergeson said the increased authority should give counties added incentive to see that the programs run efficiently and within the budgets allocated for their administration and operation.

Bergeson acknowledged, however, that much of the proposal hinges on the federal government’s decision to keep millions of dollars flowing to California to fund needed programs and to compensate for the influx of new immigrants.

Last year, California received just $324 million of the $1.45 billion Wilson requested from the federal government for the cost of educating the 400,000 illegal immigrants he says are in the public schools, providing emergency medical care to the undocumented population and imprisoning illegal immigrants convicted of felonies here.

“We must have a close relationship with the federal government,” Bergeson said. “This is one of the few budgets I can get excited about. The opportunity is there.”

Assemblyman Curt Pringle (R-Garden Grove) said he would also work to ensure that counties get the authority and money promised by the governor.

“A lot of opportunity is in giving you more flexibility in administering these programs,” Pringle told supervisors.

On local college and university campuses, however, endorsements for the budget plan were harder to find.

While the governor has promised to pump millions of dollars more into the state’s community colleges and two university systems, much of that cost is expected to be passed onto students in the form of increased fees.

For the University of California system, the governor’s budget promises a 3.2% increase, the first state funding increase for the system in four years.

But later this month, the UC Board of Regents is expected to consider a proposed $620 general student fee increase per year. At the California State University system, student fees next year are expected to go up by about $300 per year.

“The 3.2% increase represents the best possible outcome given the state’s fiscal situation,” said L. Dennis Smith, UC Irvine’s executive vice chancellor. “I don’t know that the governor could have done any better for us at this time.

“There are lots of other demands for state funds,” he said. “I think this is a ray of hope.”

Of the proposed student fee increase, Smith said students would be paying “about one-third of the cost of their education, with the state paying over 6% of the cost.”

Community college students are also certain to help finance a 3.4% increase in funding from the state, officials said.

Coast Community College District Chancellor William Vega said he was concerned that the state has placed too much emphasis on building prisons, at the expense of education.

“If we don’t educate our Californians so they are capable of leading productive lives, we will only increase the number of homeless and criminals,” Vega said.