In 2004, Governor Schwarzenegger reached a landmark agreement to protect billions in local government funding for public safety, health, libraries, parks and other locally delivered services and to prohibit the state from raiding local governments' property tax proceeds. The Governor continues the state's commitment of working constructively with local governments to efficiently serve Californians.

The proposed budget was constructed first by computing the workload budget level. From the workload budget, adjustments are made to reflect specific policy adjustments and reductions, including budget balancing reductions.

Proposed Workload Budget

Transportation

• The budget reflects the passage of Chapter 733, Statutes of 2007 (SB 717), which shifted $74 million annually in Proposition 42 revenues from the state to local transit agencies funded through the State Transit Assistance Program.
• $3 billion for local transportation in 2008-09, including $156 million for local mass transportation projects.
• $594.2 million by way of Proposition 42 to cities and counties for local streets and roads maintenance.

Health and Human Services    

• $196.9 million General Fund to fund local agency administrative costs, which includes the same level of funding for local program expenditures provided in 2007-08. The Governor's budget also continues to provide $20 million in federal funds to be matched by $10 million in voluntary county funding for the support of local child support agency staff and program services.
• $4.7 billion for California Work Opportunities and Responsibility to Kids (CalWORKs) program expenditures within the DSS budget, $108 million in county expenditures, $2.2 billion in other programs and $133.4 million for a CalWORKs program reserve.
• $90 million for counties to implement program improvements that lead to better outcomes and increased work participation rates for CalWORKs recipients and $140 million to support county administration.
• $40 million in Pay for Performance incentive funds in 2007-08, but makes available $40 million in 2008-09 for those counties that achieve improved program outcomes during 2007-08.
• State-Local Program Realignment revenues in 2007-08 are estimated to total $4.6 billion, an increase of $71.5 million compared to 2006-07.

Public Safety

• $33.3 million for the California Conservation Corps and local conservation corps for public safety and watershed restoration projects, as well as grants to local corps for acquisition and development facilities to support local corps programs.
• $6 million General Fund for the California Department of Corrections and Rehabilitation's (CDCR) Division of Adult Parole Operations to enhance mental health rehabilitative and stabilization services initiated under the department's Reducing Recidivism Strategies.

Proposed Budget Balancing Reductions

• $500 million-a one-to-five-month delay in gas tax disbursements for local streets and roads, increasing borrowable resources.
• $1.2 million in 2008-09 from the trailer fees backfill in Shared Revenues. Legislation is proposed to reduce by 10 percent the funds local governments receive to backfill Vehicle License Fee (VLF) revenues they lost when the method of assessing the VLF for commercial trailers was changed.
• $250,000 in 2008-09 from the Payment to Counties for Homicide Trials Program. Legislation is proposed to reduce the funding provided to reimburse counties for high-cost homicide trials by 10 percent.
• $3.9 million in 2008-09 from the Subventions for Open Space (Williamson Act) Tax Relief Program. Legislation is proposed to reduce by 10 percent the reimbursement counties receive for property tax revenues lost as a result of assessing lands covered by Williamson Act contracts at a lower value.
• $400 million-in 2007-08 Proposition 98 over appropriation, which provides grants to local education agencies for supportive, non-clinical mental health intervention and prevention services to children (grades K-3) who have mild to moderate school adjustment difficulties.
• $92 million-a two-month delay in the quarterly advance to counties for the Early and Periodic Screening, Diagnosis and Treatment Program.
• $11 million in 2008-09 for AIDS programs. This will be achieved by reducing state support and local assistance for various programs, including AIDS Education and Prevention, AIDS Epidemiology Studies and Surveillance, AIDS Drug Assistance and HIV Counseling and Testing.
• $75.8 million in 2008-09 in Medi-Cal payments to counties.
• $461.1 million and 14.2 positions for the Flood SAFE California Program. This program will provide subventions to help local governments protect their communities from flooding, enhance emergency preparedness and flood response, and provide grants to local governments for urgent repairs and improvements of levees in the Central Valley and the Delta.
• $3.5 million in 2008-09 from Booking Fees by reducing reimbursements in Local Government Financing.
• $1.9 million in 2008-09 from the Small/Rural Sheriffs Program in Local Government Financing. Legislation is proposed to reduce grants in 37 counties for discretionary law enforcement purposes from $500,000 to $450,000.
• $24.6 million in 2008-09 for local assistance grant funding. This proposal would reduce funding for the Mentally Ill Offender Crime Reduction Grant Program.
• $20.1 million , from $201.4 million to $181.3 million, in Juvenile Probation and Camps Program, which allocates funds to all 58 counties to support a broad spectrum of county probation services targeting at-risk youth, juvenile offenders and the families of those youth.
• $23.8 million from the Citizens Option for Public Safety/Juvenile Justice Crime Prevention Act Program. This proposal, which does not require legislation would reduce local law enforcement discretionary grant amounts by 10 percent.
• $400,000 and 2 positions in 2007-08 and $824,000 and 6.1 positions in 2008-09 for the Governor's Office of Emergency Services' (OES) Plans and Preparedness Program. This reduction will impact OES' administrative regions' ability to serve as the conduit for information to local and regional areas to provide efficient and effective support to local disaster response.
• $2.4 million and 3 positions in 2007-08 and $9 million and 10.4 positions in 2008-09 for OES' Disaster Assistance Program. This reduction will delay the processing and payment of disaster reimbursement claims from local governments.
• $5.4 million for family health programs. This will result in a reduced level of state support and local assistance funding for case management services for at-risk teens, domestic violence prevention activities and education activities including breastfeeding, nutrition and Sudden Infant Death Syndrome risk reduction.
• $3.3 million for local chronic disease programs. This will result in a reduced level of state support and local assistance funding for cancer and injury prevention surveillance activities, developing public health interventions, and monitoring environmental contaminants.
• $83.7 million in 2008-09 in reduced Child Welfare Services allocations to counties. Counties will decide how to apportion the reduced allocation.
• $814.2 million by delaying the July and August payments and advances to counties for programs in the Department of Social Services budget until September. Payments for the SSI/SSP and IHSS programs would not be impacted.
• $164.3 million by delaying the first quarterly payment to counties for Medi-Cal administration from August to September.
• The mental health managed care program is being reduced by $8.2 million General Fund in 2007-08 and by $46.7 million ($23.8 million General Fund) in 2008-09. These reductions will reduce the amount paid to county mental health plans.
• $3.1 million and 2 positions in 2007-08 and $8.1 million and 4.5 positions in 2008-09 for OES' local criminal justice grant programs such as Domestic Violence, War on Methamphetamine, Vertical Prosecution Block Grant, High-Tech Theft Apprehension, Rural Crime Prevention and Sexual Assault Felony Enforcement. This reduction will result in a lesser amount of grant funding being distributed to local agencies.
• $361 million ($119.6 million General Fund) in 2008-09 from the proposed In-Home Supportive Services (IHSS) program and would reduce county administrative funding along with a corresponding reduction in county workload.
• $401,000 in 2008-09 for the Emergency Shelter Program. This reduction in assistance to local homeless emergency shelters would result in approximately 1,900 fewer shelter spaces annually.