Money in Wilson Plan No Great Windfall in O.C., Officials Say

It’s a welcome gesture, but Gov. Pete Wilson’s plan to give cities and counties $225 million in additional funds isn’t likely to make a significant dent in the critical needs facing Orange County, local government officials said Monday.

State budget analysts have yet to determine exactly how much funding Orange County agencies would receive. But they acknowledged that the money would be targeted for specific uses and would not bring a windfall for such pressing local concerns as jail construction, courthouse funding and the host of municipal services threatened by Proposition 218.

Wilson’s plan, which still must be approved by the Legislature, would set aside $75 million to improve medical services at county-run hospitals. Orange County won’t receive any of these funds because it does not operate hospitals.

Another $50 million would go into the California Infrastructure Bank, which local governments could tap to issue bonds on sewer, road and other capital projects that boost economic development.

State officials said the bank is designed to boost business activity, and job prospects, by helping pay for infrastructure improvements for new projects. It is unlikely, they said, that the bank’s funds could be used for more basic capital projects like jails and courthouses, which top the list of Orange County’s most needed public works.

The final $100 million would return to cities, special districts and counties a portion of property tax revenues that were diverted to the schools in the 1992 and 1993 state budgets.

H.D. Palmer, assistant director of the California Department of Finance, said the governor hopes that these funds, too, are used “in programs that foster economic development, business growth and job creation.”

City and county officials said Monday that while they were happy to receive any additional funds, the sums being discussed by the governor don’t begin to make up for the sharp hits local government took in 1992 and 1993.

“It’s not a windfall,” said Fountain Valley Councilwoman Laurann Cook, president of the Orange County League of California Cities. “I don’t think that any cities are balancing their budgets based on these revenues. It’s far short of what was taken.”

Gary Burton, Orange County’s chief financial officer, said he was still trying to fully understand Wilson’s plan, but suspected it would fall far short of meeting the county’s needs.

“It’s encouraging,” Burton said. “But we don’t know yet what strings are attached to this money. We don’t know if they will cover the things we need.”

Sheriff Brad Gates wants to expand the Theo Lacy Branch Jail and James A. Musick Branch Jail at an expected cost of more than $100 million. Millions more are needed to build a second emergency shelter for abused children and a new courthouse in South County.

Wilson proposed the new funding plan as a way of sharing tax revenues from California’s booming economy with local governments, which saw their share of property tax revenues shrink by $3.5 billion in the early 1990s.

Local governments received half of that amount back with passage of Proposition 172, but the proceeds of that ballot initiative’s half-cent sales tax benefit only law enforcement agencies.

Millions more have been returned to local governments in other forms of allocations and grants, Palmer said.

Still, local officials said Wilson’s latest proposal doesn’t address the systemic budget problems facing many cities because of the 1992-1993 tax diversions.

“We continue to suffer from the effects of this,” Stanton City Manager Terry Matz said. “The losses we suffered in the early 1990s paid for backbone services like police and fire. What we need from the state now is fundamental relief.”

Matz and other city officials also said they doubted that Wilson’s proposal would significantly lessen the effects of Proposition 218, a voter-approved initiative that invalidates several types of property tax assessments.

Stanton and several other cities plan to ask voters to approve new tax assessments.

If the taxes are rejected, officials said they will have to cut their budgets further.

“Economic development is important,” Matz said. “But our needs are for basic services.”

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Allocation Impact

Gov. Pete Wilson wants to allocate $225 million to cities, special districts and counties. Here is a statewide breakdown, amounts in millions:

Amount: $100

Purpose: Returns to cities, counties and special district a portion of property tax revenues diverted to schools in the early 1990s

Local impact: Cities say changes reflect only a portion of revenues lost earlier. They don’t expect the extra money to address any larger needs.

*

Amount: $75

Purpose: Set aside to improve service at public hospitals

Local impact: County won’t see any money because it does not operate public hospitals.

*

Amount: $50

Purpose: Goes into fund local governments could tap to issue bonds on sewer, road and other capital projects boosting economic development

Local impact: County probably won’t be able to use fund for its most pressing capital projects, such as jail and courthouse construction.

Source: Local cities; California Department of Finance