PERSPECTIVE ON GOVERNMENT : The Buck Stops in Sacramento : The state siphons county funds and ignores our multiple crises--but L.A. County’s failure would affect all of California.

Whether they like it or not, the governments of California and Los Angeles County are passengers on the same sinking ship.

In large measure, counties are agents and administrative arms of the state, implementing health, welfare and other human service programs on the state’s behalf, using state and federal funds. But the recession, a huge increase in demand for services and rising costs have eroded our joint ability to provide the programs with the revenues available to us.

One would think that political leaders in both Sacramento and Los Angeles would therefore make it their business to plug the leak in the ship on which they are both sailing. Not so!

Despite ominous warnings in recent years, state leaders have been oblivious to mounting financial problems that have been straining the ability of county governments to carry out this mission. In fact, faced with their own budget emergency, state officials essentially abandoned ship, choosing to stay financially afloat at counties’ expense. In recent years, the state has balanced its budget, not through reforms and spending cuts, but by pirating nearly $1 billion annually in Los Angeles County property taxes to pay Sacramento’s bills.

Rather than face the problems spawned by the breakdown of a coherent governing structure, state officials--Democrats and Republicans alike--have opted to avoid the problem. In fact, no serious legislation addressing the local-state relationship has emerged from Sacramento in nearly two decades.

To be sure, the county has not been blameless either. As the state siphoned away local tax dollars, Los Angeles County behaved as though it still had the money to spend. In each of the last three years, the county borrowed, raided trust funds and prayed for better economic times. As a result, the gap between county spending and income has grown--this year approaching a staggering $1.2 billion.

In short, this structural breakdown between the state and county represents a total failure of governance. California deserves better.

Remarkably, only three months ago, the extent and even the existence of Los Angeles County’s fiscal crisis was still in dispute in the state Capitol and at the County Hall of Administration. Thankfully, it is now universally recognized that our county is in serious financial trouble.

For too long, Los Angeles County’s problems have barely registered on Sacramento’s radar screen. This inattention has brought us an imminent meltdown in the delivery of vital health and other human services.

Sacramento’s leadership must recognize that, unlike cities, counties have been systematically denied the authority to either raise revenues or cut spending. The county’s powers of taxation are restricted by state law and the State Constitution. Similarly, the county’s authority to cut spending is constrained by legal mandates imposed by the state to provide specific services at predetermined levels, such as health, general assistance and welfare.

A true partnership between the state and the county would grant counties the ability to raise revenue from stable and ongoing sources. Yet a proposal to levy a tipplers’ tax on the sale of alcoholic beverages at bars and restaurants barely scraped up 15 votes in the 80-member Assembly last month--a shameful tribute to the power of the liquor lobby.

At the same time, state government must change its practice of imposing costly mandates on local government for which the state refuses to pay. Sacramento should either fund the programs that it requires counties to provide or relieve counties of the burden.

The need for change in Los Angeles County government is just as great after years of “business as usual,” even in the face of dramatically changing financial and political circumstances. The county must rethink its organization to prepare for the 21st Century. One place to start is in the bloated bureaucracy which has weighted it down for years. The number of county employees has remained virtually unchanged, around 86,000, over the past five years. By comparison, the City of Los Angeles has cut its general-fund supported work force by 10% during the same period.

Nowhere is the case for change more compelling than in the delivery of health care--the fastest growing cost to county government. The county owns and operates one of the most bureaucratically top-heavy hospital systems in the Western world. Our system, built in the 1930s for the 1930s, in recent years has resisted change. Yet, fast-paced developments in the world of medicine and finance demand that the county rethink the way it meets its obligation to provide health care to the poor.

In the immediate future, private-public partnerships in health care delivery can offer a more efficient and affordable way to serve the public. If, indeed, most private hospitals are sitting half empty in our county, there would appear to be a natural fit between the demands for county health services, on one hand, and the excess capacity in the private sector on the other.

Such a partnership requires both the county and the private sector to break some bad old habits. The county must concede that it is not the only entity that can provide quality medical care, and the private hospitals must commit to serving a population they have largely avoided through the years--the poor and the indigent. With such innovative thinking, Los Angeles can become a national model for health care delivery at substantially lower cost.

At bottom, it is terribly shortsighted for state government to turn its back on Los Angeles County. Nearly one in three Californians lives here, and the state’s economy is significantly affected by what happens here. If our county goes down, the state will not be immune to the consequences.

We cannot allow the state-county ship to founder. As the Legislature reconvenes for its final session, we must not forget that the public depends on state and local government to work together to meet and surmount the challenges confronting us all.