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County forced to pick up the state’s tab

Posted: July 10, 2009 9:36 p.m.
Updated: July 11, 2009 4:55 a.m.
Banks will stop honoring state-issued IOUs today, which will force Los Angeles County to pick up the state's portion of services, a county officials said.

"The county will start coming out of its own pocket for state-mandated services," said Tony Bell, spokesman for county Supervisor Michael D. Antonovich.

Those services include public safety and social services staffing, said Lori Glasgow, Antonovich's budget deputy.

Bank of America Corp., Wells Fargo & Co., Citigroup Inc. and some regional banks in the state said they won't accept the state-issued IOUs for payment after Friday.

In a letter sent from Antonovich to Gov. Arnold Schwarzenegger on Thursday, the supervisor charged the state with passing the buck on paying for state responsibilities.

"The county will be left holding worthless promissory notes. The impact of this action by the state is to drain the limited county resources to pay for state mandates," Antonovich said in the letter.

The supervisors also called for major reforms to the state budget process. Antonovich implored the governor and state lawmakers to make the Legislature part time; to eliminate term limits; to replace state commissioners' salaries with $100 per meeting stipends; and to adopt a two-year budget requirement.

"A two-year budget allows us to plan, and we know for at least two years the budget is solid," Bell said.

Reforms would help the state's annual fiscal planning, but balancing the budget comes down to grasping reality, Bell said. "The state spends more than it brings in and because of excess spending, bureaucracy and bloat, the state's gone bankrupt," he said.

In contrast, Bell said, the county's fiscal prudence has left it with money to offset the negative impacts of the recession.

"The county, because of its conservative fiscal policies, is in good shape," he said. "The county prepared for a rainy day and that rainy day is here."

Some local agencies that receive state funding are nervously watching the state budget process.

LARC Ranch has already seen 3 percent sliced from its budget, said Kathleen Sturkey, executive director. LARC Ranch provides adult day care and long-term services for disabled residents of the Santa Clarita Valley.

Sturkey anticipates an additional 7 percent cut in LARC Ranch's funding by September.

Officials at the Domestic Violence Center of Santa Clarita are keeping a close watch on the budget fiasco, executive director Nicole Shellcroft said. The agency has not received a state IOU.

"I'm feeling more hopeful," she said Friday, noting that legislators are focused on cuts rather than complete elimination of Domestic Violence Program funding. "A cut I can live with.

"At least I know I'll get something."

The center has an annual operating budget of about $450,000. About $200,000 of that budget is state-provided, with another $80,000 in funding from Los Angeles County.


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