County Has Clearer Picture Of State Budget Impacts, But Questions Linger

Placer County will enter the new fiscal year Friday with a clearer picture of potential state budget impacts, but several lingering questions were left unanswered by the California Legislature’s passage of a 2011-12 state budget Tuesday.


The most immediate question facing Placer County is how the state budget ultimately will impact the future of the Placer County Redevelopment Agency.

Budget trailer bills approved by the State Legislature lay out two options for the future of county and city redevelopment agencies throughout California.

One would eliminate the agencies while allowing local governments to designate successor agencies to handle remaining obligations such as bond payments.

The other trailer bill would allow redevelopment agencies to remain in operation only if they redirect much of their revenue streams to the state.

On Tuesday, Placer County officials met to review details of both options as part of an ongoing effort to map out the agency’s future.

Acting in its role as the agency’s board of directors, the Board of Supervisors approved the agency’s $29.2 million budget June 21 so the agency will have a budget in place when the new fiscal year starts.

After Gov. Jerry Brown proposed eliminating redevelopment agencies in January, the Board of Supervisors approved a resolution aimed at ensuring Placer County would be able to spend $18.4 million in funds already programmed for county redevelopment projects. The resolution did not fast track any of the Redevelopment Agency’s projects and programs, and was consistent with the governor’s proposal.

Placer County has redevelopment areas in North Auburn, North Lake Tahoe and the Sunset Industrial Area in South Placer. The $18.4 million is set aside to help fund a variety of projects, including Highway 49 streetscape improvements and the Quartz Ridge Family Housing Project in North Auburn, transportation improvements in the vicinity of the Sunset Industrial Area, and the Kings Beach Commercial Core Improvement Project at North Lake Tahoe.

Other lingering questions about state budget impacts include:

  • Will the state fully fund new responsibilities it is giving counties under the budget’s realignment plan?
  • Will counties face mid-year state funding reductions during 2011-12?
  • Will a new state fire prevention fee hurt several local independent fire districts that may need to ask local voters to approve direct-charge assessments so they can maintain their firefighting capabilities?

A state budget trailer bill would create a fire prevention fee of up to $150 per year per structure in areas where the state is responsible for fighting wildfires. The fee would offset fire prevention funding that has come from the state general fund until now.

Several local fire districts have been hard hit by declining property tax revenue over the last three years. Placer County officials are worried the districts may find the electorate unreceptive if most voters already are facing a new state fire prevention fee. Placer County officials also are concerned the state could spend fee revenue collected in Placer County on fire prevention efforts elsewhere in California.

Questions about possible mid-year state funding reductions to counties arise from the state’s assumption its 2011-12 revenue will exceed earlier projections by $4 billion. If revenue comes in lower than expected, mid-year cuts would be triggered into effect Jan. 1, 2012 that would affect education, corrections programs and safety-net services provided by counties, including the Placer County Health and Human Services Department.

Under the budget’s realignment plan, the state will shift to county public safety agencies responsibility for managing many additional low-level adult offenders and adult parolees.

In addition, the budget makes counties permanently responsible for foster care and child welfare services, mental health programs, substance abuse treatment and adult protective services.

Gov. Brown initially proposed funding realignment by holding a statewide special election where voters would be asked to extend several tax increases enacted in 2009 that will expire today. The governor’s plan stalled in the Legislature, so realignment now will be funded largely through a sales tax swap. Counties are concerned the new revenue may not fully cover their additional costs.

The Board of Supervisors adopted a proposed budget June 7 so Placer County will have a spending plan in place at the start of the new fiscal year. The proposed budget was adopted following a comprehensive series of budget workshops since February.

The proposed budget is for approximately $720 million, down 4.9 percent from the county’s final 2010-11 budget.

The proposed budget will serve as an interim spending plan until the board adopts a final budget in September.