Where funds come from, where they go
This is the first of a two-part series on state funding for California’s counties, and its impact on Nevada County.
The eyes of California’s 58 counties will be on the state Capitol today for the start of a legislative session expected to produce budget cuts across the board.
And with nearly half of its $125 million budget coming from state coffers, Nevada County has much to lose when lawmakers start whittling away at a projected $12.4 billion budget deficit for the coming fiscal year.
But it’s not just the state’s fiscal woes and where legislators’ cuts might fall at the local level that concerns Nevada County officials.
It’s a issue of local versus state control, said Laura Matteson, the county’s senior administrative analyst.
“Our hands are tied by the strings the state attaches to funding,” Matteson said. “We want more flexibility to provide the services that are really needed and more control over how we spend state money.”
State money funds, to varying degrees, virtually every county program, including child care for working parents, in-home supportive services for the elderly and disabled, drug court and road maintenance.
But state funding restrictions, programs mandated but not funded by the state, and lack of control over how state dollars are spent at the local level has county officials wondering what happened to California’s state-local fiscal reform.
In a 1983 report, “New Partnership Task Force on State and Local Government,” Gov. George Deukmejian noted that while local government was generally perceived to be more in tune to the needs of the people, a trend had developed that resulted in a centralization of power at the state level.
“Instead of cities, counties and special districts working together with the state to serve the people, the relationship has changed, requiring local government to look first to the state to ensure its fiscal ability to function,” the report stated.
Since then, the state has done some things to improve its fiscal relationship with local governments, but there’s a lot of work left yet, said Diane Cummins, chief fiscal policy advisor to Sen. John Burton, D-San Francisco, the president pro tempore of the state Senate.
Cummins – who worked 21 years for the state Department of Finance and helped craft Gov. Deukmejian’s 1983 report – said the state likes to know what it’s buying when it funds local programs. But she agreed local flexibility is a good thing.
Flexibility at the local level is particularly important when times are tough and local governments have to string funds together to make programs work, Cummins said.
“Hopefully, some ideas will come out of this fiscal crisis to give counties more flexibility,” Cummins said. “Some of the best and most creative ideas come from local government because they’re on the front lines and know how it works.”
Of Nevada County’s $125,740,299 budget for the fiscal year 2001-02, $55,265,869 – almost 44 percent – comes from state and federal sources. However, less than 9 percent of the county’s “intergovernmental” funding share is discretionary.
And even discretionary funds can get tangled in Sacramento politics, said Donna Fitting, the county’s chief fiscal/administrative officer.
“People are under the impression that the Board of Supervisors has control over the county’s $125 million budget, but the state essentially has strings attached to everything they send us,” Fitting said. “We kind of kid ourselves that we have a $125 million budget when so much of it’s restricted.”
But while the state dictates how its funding to counties should be spent, Matteson said, lawmakers sometimes overlook the fact that each county has different needs.
Senior citizen programs are a good example.
Because Nevada County has one of the largest senior populations in the state, Matteson said state funding for the county’s Adult Protective Services program should be higher than for counties with smaller retired populations.
“But the state doesn’t make that distinction and allow that type of flexibility,” Matteson said.
Cummins agreed the needs of Nevada County are different than the needs of a larger Los Angeles or smaller Butte County.
“One-size-fits-all solutions don’t work very well,” Cummins said, particularly in a state as diverse as California.
Cummins and Matteson said funding allocations to counties are determined by set formulas involving population and caseload numbers. However, both said funding formulas don’t always reflect the true needs of communities and what the people want.
To increase its clout in the battle for state funding, the county recently adopted a legislative program and hired a lobbying firm to represent Nevada County interests during the legislative session that starts today.
Increased funding for the county’s Adult Protective Services program is included in the county’s legislative platform.
The APS issue illustrates the difficulties rural counties face in delivering state mandated programs with limited, unreliable and sometimes nonexistent funding.
Passage of SB 2199 in 1998 required that counties provide services for victims of elder abuse and neglect, and came with promises of more funding from the state to deliver the mandated service, said Rob Shotwell, the county’s APS program manager.
But while the county’s APS program is state mandated, it has never been fully funded by the state, Shotwell said.
To make matters worse, state APS cuts in Gov. Gray Davis’ budget for the current fiscal year could impact the level of service the county is able to provide, Shotwell said.
“When the state passes legislation that requires counties to provide a service, and then funding is cut so the programs can’t be implemented, it leaves the county out to dry in trying to provide those mandated services,” said APS Director Phil Reinheimer.
Since 1998, Shotwell said, the number of cases of elder abuse and neglect investigated by the county’s APS program has gone up 500 percent, yet funding has been cut.
“Our caseloads are going up, yet our funding is going south steadily,” Shotwell said. “We need more flexibility and more funding.”
Shotwell said the county is required to match state APS funding with money from the general fund. Cuts in state funding, however, may require the county to go over its established funding share to deliver the mandated service.
Small rural counties can’t afford to make up the funding difference, according to the county’s legislative platform. Subsequently, the county’s lobbying firm will seek full state funding for APS programs.
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