Hang Tough, for Counties’ Sake

With considerable flourish, Gov. Pete Wilson announced recently that he will allocate $100 million of the new budget bonanza to California cities, counties and special districts as a start on making up for the state’s massive property tax shift from local government to public schools during the recession.

In the process, the governor read part of a letter of appreciation from the California State Assn. of Counties, as if to say “So there!” to critics of the tightfisted manner in which his administration had dealt with local governments. But while the county officials could not afford to sneer at the $100 million, that amount could, at best, be considered a down payment on the state’s debt to local government.

Indeed, members of the state Assembly--both Democrats and Republicans--did not seem overly impressed. This week, the Assembly voted 75 to 0 for a bill that would put an end to the state’s ever-growing grab of local property tax revenues and begin transferring the $3.5-billion tax base back to local government. The bill now goes to the state Senate.

The strong bipartisan vote emphasized the Legislature’s belief that it’s time the state began returning the property tax base it appropriated as an emergency measure back in 1992 and 1993, when the California budget was awash in red ink because of the recession. The shift has been particularly hard on counties, which gave up $2.6 billion--money they had counted on to finance general government operations including sheriff’s departments, parks and recreation and health care.

If state funds currently going to education shift to local government, a like amount must be made up to schools from other sources to meet the state constitutional provisions of Proposition 98. The best time to do it, of course, is when the economy is good, as it is now in most parts of the state. The recent actions by both the Legislature and Wilson assure that the property tax money will become a part of the state budget negotiations over the next month or so. In that mix, it will compete with a variety of state budget needs for funds.

With the Assembly’s 75-0 vote this week, the lawmakers should find themselves in a strong bargaining position on this issue. They ought to hang tough as a matter of fairness and sound public policy.