Realignment Might Be Good For Cars
But Is California a Porsche or a Lemon?

by Sheila Kuehl
August 4, 2011

This is the eighth in a series of essays presenting the roller coaster ups and downs of California's 2011-12 budget history.  This essay presents the concept of "realignment", one of the ways in which the budget signed by the Governor on June 30th "found" sufficient revenues to avoid cuts to K-12 education.  The real name for it should probably be "we'll transfer responsibility to cities and counties for a number of big programs and then maybe we'll also provide enough money to carry them out."  Because local entities are thought to provide incarceration and probation services (i.e.) more cheaply than the state, this transfer is assumed to leave more revenue in the budget for other expenditures.

The next and final essay in this series will present an analysis of the budget winners and losers.

Realignment Means Never Having to Say You're Sorry

A few years ago, when the federal government was trying to figure out a gov-speak way to tell communities that their job-rich military bases were being eliminated, they used the term "realignment", which is a lot nicer than saying, "we're out of here". 

In the case of California's 2011-12 budget, the term was used as shorthand for transfers of specific program responsibilities from the state to counties and cities, coupled with an assertion that people's lives would be made better by localizing these services.  Some of the transfers reflected big decisions in the area of public safety.  Some decisions related to the many safety net programs simply reflected a change in who did what.  Of the funding sources identified to support the transfers, some were potentially long-term, and some were not.  Everyone seemed to mostly be crossing their fingers in hopes that the funds would be adequate to allow local entities to do the job. 

When your car is realigned, it tends to run better and straighter.  Only time will tell if that's the case for California.  The details are set out, below.

You Take It!  No, You Take It!

Ever since the passage of Prop 13, and probably before, the Legislature, with its constantly changing members and strategies, and its constant attrition of experience and history, as well as Governors, who are here today and gone tomorrow, have been making short-term budget decisions about whether responsibility for funding and running programs such as health, welfare and public safety should be allocated to the state or to local governments.

In 1991, for instance, responsibility for mental health programs was transferred from the state to the counties. The problem of adequate funding was, as it is now, the sticking point, because, since Prop 13, many taxes that used to be collected by cities and counties are now directly collected by the state and allocated back "down" to the local governments.   In the 1991 mental health realignment, the Legislature and the Governor agreed to raise two kinds of taxes and allocate the monies to the counties to deliver the services.

California's Little Prison Problem

The current consideration of realignment began this year with Governor Brown's January budget proposal, when he suggested reassigning the incarceration of low-level offenders and the supervision of parolees to the counties.  Low level offenders were generally defined as prisoners who had never been convicted of a serious or violent crime, nor been required to register as a sex offender. This proposal was projected to help solve two problems:  the need to cut expenditures, and the requirement to move prisoners in order to ease overcrowding in the state prisons.  In addition, those on parole from prison, or on post-release supervision locally, were to be sent back to prison only for the commission of a new crime, and no longer simply for a violation of a condition of their release. 

There was serious pushback from local authorities and members' constituents about the lack of capacity in local jails and the lack of local rehabilitation and transition programs.  Visions of wholesale release of dangerous criminals abounded, even though lifers, high risk sex offenders and any felon who had committed a serious or violent crime would remain in the custody of the state prisons.  The trick for the budget balancers was how to lower expenditures from the general fund while, at the same time, providing a source of money to fund local governments to incarcerate, rehabilitate and supervise low level offenders, and parolees.  Even though the overall cost to the state would be less, money still had to flow to the locals to pay for the public safety piece.  And there was more.

Mad As A March Hare, And Just As Broke

In March of this year, the Governor and the leaders of the Assembly and Senate were still seriously engaged in trying to get four Republican votes to put the tax extensions on the ballot.  Still, cuts had to be made quickly to keep the 2010-11 budget from falling apart.  The Governor signed a host of trailer bills containing mountains of cuts and also signed AB109, a bill creating the shell of a structure for realignment.  Unfortunately, AB109 did not actually contain the hoped-for funding source--the tax extension money--since the negotiations were still limping along. 

Understandably, city and county law enforcement agencies were a tad upset, worried that they might be handed a whole host of new responsibilities, but not handed enough money.  They also claimed that the state constitution, under a provision adopted by initiative, prevented the state from raiding local funds for state uses.  To law enforcement, realignment looked suspiciously like a tricky way of doing just that, by allocating responsibility, along with a very iffy funding source, and letting them figure out how to pay for the rest.
.
The Governor, to allay such fears in March, took five hours crafting a careful signing message for AB 109, saying that he would not implement these changes without an adequate grant planning program and a real appropriation of monies.

Child Care or Jails?  Who Do You Think Got The Money?

By June, with no tax extensions in sight, balancing a budget without cutting the schools to ribbons began depending heavily on the savings projected from realignment.  Counties instantly began channeling Jerry Maguire, crying "Show me the money!" 

Desperately inventive, the state turned to Prop 98, the constitutional provision that targets a percentage of the overall General Fund specifically to K-14 schools, and began to craft ways to milk those monies for realignment.  Unfortunately for the plan, in order to lower the Prop 98 guarantee, you have to lower the sum total of tax monies going into the General Fund, which no one wanted to do, and which wouldn't help, anyway. 

Solution: in the budget, as passed, a portion of sales taxes which were currently going into the General Fund was diminished, and an equal portion was directed into special funds.  Presto!  The total amount of monies remains the same, but the total General Fund is less and so, therefore, is the required Prop 98 amount.  Then, in order to remove an equal amount of expenditure from Prop 98 without "hurting" K-12, virtually all child care programs that had been funded within the Prop 98 guarantee (by choice of the Legislature and not by requirement) were removed from Prop 98, or, as they put it, "re-benched".  This meant that, with the single exception of pre-school, money to fund child care had to be found somewhere else within the General Fund.  Temporary funding was found, but the whole issue is being kicked down the road into a new round of negotiations not-so-affectionately dubbed "Realignment Two"---in plain English--there is no solution, yet.

Ready!  Fire!  Aim!

A new problem, then, remained to be solved.  Since the monies going into special funds are not allowed to be used for general state purposes, they had to be targeted at something specific.  All of a sudden, realignment was back on the table.  5.5 billion dollars would be allocated, at least for this first year, to specific local law enforcement expenditures on incarcerating low level offenders and supervising parolees, as well as to a host of local health and human services programs.

Putting the Humanity in Human Services?

There are several health and human services areas in the realignment.  Foster care and child welfare responsibilities will be shared by the state and locals for a while, until a time when the counties will take on total responsibility.  Other transfers include court security (money goes to the counties to give to sheriffs), the portion of juvenile justice not already allocated to local governments, mental health services, and adult protective services. 

As an added boon, the transfer of responsibility for low level offenders and parolees is projected to move at least five thousand women from state prisons to jails in their local communities.  This can create a plus in the human arena because studies show that women in state prisons get far fewer visits from their families than do men in the same circumstances.  Being incarcerated closer to home could make it easier for their families to get to the facilities and visit. 

Transferring parole services was also billed as a positive, under the theory that more resources in this area can make a big difference in people's lives.  For courts, however, it means a higher volume of post-release supervision duties.  Parole violations are currently heard by the Parole Board.  The caseload will not be as heavy, however,  as was first projected, because, in the original proposal, the courts were tasked with doing all hearings on violations, even for offenders who were on parole from state prisons.  The final bill limited court responsibilty only to those who had been incarcerated in local jails.

Next Year: Phase Two

What happens to other social services, as well as healthcare and child care, remains under discussion.   As to healthcare, it is possible that the state may take on costs associated with carrying out the requirements of the national health plan, including care for indigents.  Counties could directly take on food stamp administration, child support, child care and CalWORKS.  Part of the delicacy of negotiations stems from the fact that caseloads are growing, which means there has to be a growing revenue source for Phase Two.

Stay tuned.

Next:  The Winners and The Losers