Eric Woolery: Realignment could bring county shortfalls
Posted by Chris Emami on February 21, 2013
The Orange County Register ran an editorial sent in by Eric Woolery who used to serve on the Orange County Board of Education. He also sent a copy of the editorial and I wanted to take a moment to post it here as it was a very interesting read.
Realignment could bring county shortfalls
Beware of the state bearing gifts. The fiscal cliff in California could be a whole lot steeper for counties if they fail to plan for Gov. Jerry Brown’s realignment of both criminal justice and social services.
If you follow the money, public safety realignment – which requires counties to bear more of the burden of housing criminals – is only 34 percent of the realignment funding. The real financial cliffhanger is the other 66 percent that eliminates most of the state’s responsibility for health and human services by transferring that responsibility to counties. While medical professionals and social workers may welcome the demise of state agencies, from a fiscal point of view, this could be the “gift” that pushes California counties over the fiscal cliff.
Gov. Jerry Brown gestures to a stack of reports on California prisons as he discuss his call for federal judges to return control of California prison to the state during a news conference at the Capitol in Sacramento, Calif., Tuesday, Jan. 8, 2013.
Under previous state realignment in 1991, counties only had to provide maintenance of existing programs. With the 2012 realignment, counties now own the programs from housing criminals to providing funding for all health and social service programs.
Granted, ownership of these programs gives the county some local control; however, many of the health and human services programs, like medical and mental health services, are federally funded and come with federal mandates. These mandates leave the counties with very little room for innovation in program content and cost savings. Using the current rate of inflation to factor in cost increases, health and social services could add about $3.1 million to the county’s budget each year. Unfortunately, the rate of inflation on medical services tends to be higher than the overall rate of inflation. These programs could grow exponentially, and the shortfall would be the county’s to bear. Add to this the growth in the number of people who need these services and you have the potential for major fiscal problem for counties.
Proposition 30 added money for these programs but that revenue source may not be there if the economy goes back into recession. Then there is the potential for new federal mandates. National tragedies like the Sandy Hook shootings often spawn new federal mental health requirements and services that will need to be paid for by the counties.
Under Prop. 30, the state covers 50 percent of any new federal mandates, which is some protection for counties. But what about the timing of the state payments? Currently the state is obligated to pay for the increased costs for state mandates under SB90. Each year, counties submit their claims after the fiscal year is over only to have the claim paid many years later and only after the state has challenged and in some cases reduced the claim. That would leave the county on the hook for 100 percent of the cost today with the promise of, at best, 50 percent reimbursement down the road.
This means counties need to be ready for the fiscal challenges brought on by health and human services program realignment. There is potential here to make these services better and more efficient, but the time to plan and streamline is now, else the county could find itself over the fiscal cliff.