USC Price School of Public Policy

Realignment of Funds for Social Services Discussed

Knowledge in Action:

Realignment of Funds for Social Services Discussed

By Matthew Kredell

USC Bedrosian-ASPA forum Vincent R. Holmes, left, principal analyst of L.A. County’s service integration unit, and Laura Farinella, deputy chief of the Long Beach Police Department, at USC
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Representatives of county and city governments joined academic policy scholars on Feb. 10 at USC to begin a yearlong series of panel discussions exploring California’s realignment of services and funds in the areas of prisoner reentry, social services and redevelopment.

Titled “Shifting the Burden,” the series is presented by the USC Judith and John Bedrosian Center on Governance and the Public Enterprise, which is housed at the USC Sol Price School of Public Policy, and the Southern California chapter of The American Society for Public Administration (ASPA). Future events in the series will explore each issue of social services, safety and redevelopment in greater depth.

Debbie Dillon, president of the Southern California ASPA chapter, moderated the event, which featured Dean Misczynski, adjunct policy fellow at the Public Policy Institute of California; Laura Farinella, deputy chief of the Long Beach Police Department; Vincent R. Holmes, principal analyst of Los Angeles County’s service integration unit; Daniel R. Jordan, director of finance for the City of La Canada-Flintridge and an adjunct associate professor at USC Price; and Stephen G. Harding, city manager for Jurupa Valley.

The hot topic of the day was January’s ruling by the California Supreme Court that upheld a state law passed last summer abolishing city redevelopment agencies. The agencies used property tax money to partner with private companies to encourage development in blighted areas. As a result, those funds will go into the state coffers.

“There’s going to be an extra amount of fiscal stress being put on cities as a result of redevelopment being [dissolved],” Jordan said.

Harding noted that redevelopment began in 1945 to induce the private sector to invest in areas where risk was perceived to be too high without some assistance from the public sector. Those businesses then generate sales-tax dollars for the city. Over the years, success stories have included the redevelopment of downtown Los Angeles, San Diego’s Gaslamp Quarter and North Hollywood’s Arts District.

There also were allegations of corruption, inefficiency and misuse of funds.

Gov. Jerry Brown led the movement for dissolution of redevelopment, wanting the funds for public services rather than subsidizing private developers. There is hope through negotiations with the state Legislature for redevelopment to re-emerge in a new form.

“The damage is off the scale in how we’re going to deal with this,” Harding said. “There are numerous cities that were not prepared for that [Supreme Court] decision.”

Jordan said that, for cities like La Canada-Flintridge that did not make use of redevelopment, the decision levels the playing field.

Misczynski noted that the modern idea of realignment started with President Ronald Reagan. The philosophy at the core of realignment is to place government authority, function and money at the level of government in which the program can be run most effectively.

“This is something that can be seen as either good, logical public policy or a cheap trick to justify cutting funding to states and local jurisdictions,” Misczynski said.

He explained that most realignment in California has been done to get around Proposition 98, established in 1988, which requires a minimum of 45 percent of the state budget to go to schools. In 1991, under Gov. Pete Wilson, the state budget was in chaos with many programs being cut, particularly in mental health.

The idea was proposed to increase sales tax and vehicle license fees to create additional revenue. However, 45 percent of that new revenue still would have to go to schools. By realigning the money into a special fund that went straight to local governments – never passing through the state’s general fund – Wilson could circumvent the Proposition 98 requirements.

The state currently is undergoing a wide-scale realignment to lessen the burden on state prisons by shifting 30,000 nonviolent, nonsexual, nonserious offenders to county jails over the next two years.

“It’s the biggest change in correctional policy in California in four or five decades at least,” Misczynski said. “California constitution says that if the state mandates local [governments] to do something new, the state has to reimburse them for costs incurred. Arguably, realignment of 30,000 prisoners to local jurisdiction is a mandate. Arguably, the amount the state has given local [governments] to pay for this is not enough to reimburse for actual costs.”

Harding, who is city manager of California’s newest city, spoke of the trouble he is facing because of last year’s Senate Bill 89, which realigned motor vehicle license fees to a state transportation fund. For Jurupa Valley, the realignment took away about a third of the city’s second-year budget of $22 million. Harding said the move could cause Jurupa Valley to be insolvent in 18 months.

“I was surprised that there weren’t more solutions on the table,” said Liana Elliott, a master’s student in public policy and urban planning at USC Price. “It seems like a lot of this is still in the damage-assessment phase. Everyone is trying to figure out what it means for their department or city. I was hoping to hear a little bit more about shifting the burden off – not on – the community’s shoulders.”

Harding concluded by saying, “I think we have to figure out different ways for civic discourse, hopefully some balance of policy and politics, where we can find a better way to resolve these particular issues of local and state government.”