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HomeMy WebLinkAboutMINUTES - 11042003 - C55 �.• tts TO: BOARD OF SUPERVISORS 't. ' ' CONTRA COSTA FROM: John Sweeten, County Administrator 'y_,, a COUNTY DATE: November 4,2003 - -• - ON SS SUBJECT: Federal Assistance for California's Budget Deficit SPECIFIC REQUEST(S)OR RECOMMENDATIONS) & BACKGROUND AND JUSTIFICATION RECOMMENDATION(S): 1. EXPRESS support for Governor-elect Schwarzenegger's effort to seek federal assistance in reducing California's budget deficit and improving its economy. 2. RECOMMEND that the Governor consider requesting President Bush's support for the following measures as part of his discussion concerning federal assistance: ➢ relief from federal penalties, including those for child support automation system and food stamp quality control; ➢ administration support of 5.271 and H.R. 1476 to allow an additional advance re-funding of bond indebtedness to take advantage of lower interest rates by state and local government; ➢ increased appropriations for SCAAP (State Criminal Alien Assistance Program) which partially reimburses state and local governments for the cost of incarcerating undocumented immigrants convicted of felonies or multiple misdemeanors; ➢ increased funding for Medicaid and Medicare, to support California's medical safety net system for the uninsured; > allocation of federal ethanol fuel tax receipts to maintain California's current allocation levels for transportation infrastructure improvements and maintenance. 3. REQUEST our Congressional and State legislative delegations to join in supporting these and other sources of federal assistance to the State of California and California's local governments. CONTINUED ON ATTACHMENT: YES SIGNATURE: �f RECOMMENDATION OF COUNTY ADMINISTRATOR—RECOMMENDATION OF WfRD COMMITTEE ,APPROVE _OTHER SIGNATURE(S): ACTION OF SO LI r 4, ZLAJJ APPROVED AS RECOMMENDED—OTHER VOTE OF SUPERVISORS I HERESY CERTIFY THAT THIS IS A X UNANIMOUS(ABSENT_ None ) TRUE AND CORRECT COPY OF AN AYES: NOES: ACTION TAKEN AND ENTERED ABSENT: ABSTAIN: ON MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE SHOWN. Contact:Sara Hoffman,336-1090 ATTESTED November 4, 2003 cc: CAO JOHN SWEETEN,CLERK OF CSAC(via CAO) THE BOARD OF SUPERVISORS Urban Counties Caucus(via CAO) AND COUNTY ADMINISTRATOR Employment S Human Services Dept.Director Health Services Dept Director 7ar�u_�- Child Su ort Services Director ( Debt Manager Sheriff-Coroner Deputy"' BACKGROUND/REASON(S)FOR RECOMMENDATION(S): Governor-elect Arnold Schwarzenegger has met with President Bush to discuss potential assistance from the federal government to help relieve California's budget crisis and improve its economy. The press reported that the conversations were positive,but not specific. Recently, Los Angeles County suggested that the large, urban counties coalesce around a few issues that would be of help to California's budget situation. Relief from penalties for the Child Support Automation System and Food Stamp quality control would have the advantage in that they would be cost neutral to the federal government and yet provide significant financial relief for the State of California(and county government to the extent that we are required to pay for those penalties). Other measures would be an actual expense to the federal government or, as in the case of the advance bond re-funding, a reduction in revenue. While any and all federal assistance to California's budget situation would be welcome, several would benefit not only to California,but also county government. These include: Child Support Penalties — The State of California is currently out of compliance with federal requirements to automate the statewide child support system. While counties have no control over the statewide system, nonetheless the state chose to "share" the penalty with local government as part of its FY 03-04 budget balancing strategy. Statewide counties paid $52.1 million in penalties (25% of the total $208 million). Contra Costa County paid$1.3 million. Food Stamp Error Rate Penalties — In California, counties administer food stamp programs on behalf of the state. Counties determine eligibility, calculate benefits and issue benefits to low income recipients in accordance with state regulations. Overall, California was not in compliance with federal quality control requirements set by a now defunct formula, repealed in 2002. California has been reducing its error rate and it is now below the national average. Nonetheless, California has been assessed a$114.3 million penalty for FFY 2001 and $62.6 million for FFY 2002. Contra Costa's share for FFY 2002 is approximately $297,000. While agreement has been reached to allow us to "reinvest" the penalty into program improvements, it will still increase county costs for the program. State Criminal Alien Assistance Program (SCAAP)-- SCAAP partially reimburses state and local governments for the cost of incarcerating undocumented immigrants convicted of a felony or multiple misdemeanors. Since immigration is a federal responsibility, states have maintained that these costs should be borne entirely by the federal government. Historically, SCAAP reimbursements have only covered about 40%of state and local costs for incarceration and did not cover other criminal justice system costs such as apprehension, court, prosecution, public defender and probation. Despite this low level of funding, the program was cut in half this year. Contra Costa County is receiving $450,000 this year, compared to $900,000 the previous year. California as a whole received $95.3 million, of which$66 million was retained by the State of California. Advance Re-funding-of Municipal Bonds — Current federal law permits state and local governments a single advance re-funding of municipal bonds issued to finance government facilities for essential government functions. S. 271 and H.R. 1076 would allow an additional advance re-funding. This could be a significant financial benefit to state and local government, depending upon the interest rate. For example, Contra Costa's bond for construction of the Regional Medical Center cannot be re-funded again under current law until the first call date, 2007. At current interest rates, re-funding could generate in excess of$600,000 a year in debt service savings. (Savings would vary,of course, based on actual interest rates.) Medical Care for the Uninsured — Counties act as the medical provider of last resort, providing a safety net to millions of legal and illegal immigrants as well as citizens without health care coverage. More federal support for these essential functions would be very helpful, since medical costs are one of the fastest growing components of expense for state and local governments. Congress is currently considering FFY 2004 appropriations, including Medicaid Disproportionate Share Hospitals (DSH) funding, reimbursement of undocumented immigrant medical costs, eligibility for legal immigrant pregnant women and children and other measures. The House version of the Medicare Prescription Drug bill (HR 1) provides full restoration of DSH founding, worth $104 million to California and $2.5 million to Contra Costa county, while the Senate version, S.1, does not. Conversely, the Senate version contains language re f inding/eligibility on immigrant medical services. Ethanol Tax Allocations—Currently, the federal government taxes ethanol fuels at a much lower rate than other fuels and allocates a portion of it to its general fiend. In response to water quality concerns, California is fazing out MTBE as a gasoline additive and replacing it with ethanol to achieve required air emission standards. Under the current ethanol taxing system, this substitution will reduce California's federal fuel tax receipts by approximately$600 million per year, of which over$500 million is designated for urban areas. This could have a significant impact on infrastructure maintenance and improvements, jobs and economic development. However; if all of the ethanol tax receipts were deposited into the Highway Trust Fund, not the Federal General fund, California's allocation would be likely to kept whole. Contra Costa County's recommendations concerning these possible areas of federal assistance would be conveyed to our Congressional and State legislative delegations with a request for them to support these and other sources of federal assistance to the State of California and California's local governments. We would also forward the recommendations to the Urban Counties Caucus and to the California State of Association of Counties(CSAC) for their consideration as part of their legislative advocacy program. The Board of Supervisors Contra John Sweeten County Administration Building Costa Clerk of the Board Pine Street,Room 106 and Martinez,California 84553-1293 County o u m (925y Ceadministrator J_ (926)335-1900 John Glols,1st District Gayle S.Ullkema,2nd District � ..•cA_.,o� Milne Greenberg,3rd District N�. Mark DeSaulnler,4th District Federal D.Glover,5th District 1 ,H November 4, 2003 - The Honorable Arnold Schwarzenegger Governor-Elect, State of California Schwarzenegger Transition Office 831 L Street Sacramento, CA 95814 Dear Governor-Elect Schwarzenegger: Your leadership in seeking federal assistance to reduce California's budget deficit and improve its economy is very much appreciated by Contra Costa County. As the administrative arm of the State for many programs that serve California's businesses and residents, counties are directly affected by the State budget situation. To support you in your efforts to engage the federal government,we have compiled a brief list of priority measures which we think would have a significant impact on California's budget situation. Measures such as relief from federal penalties would have the added advantage of being cost-neutral to the federal government while others would have minimal impact financially or provide essential services. Please let us know if you would like further information any of these suggestions or if we could support you in other ways in engaging the federal government to the benefit of California. Sincerely, Ik eSauIm7er Chair, Board of Supervisors enclosure cc: Congressional Legislative Delegation State Legislative Delegation Urban Counties Caucus California State Association of Counties Contra Costa County Recommendations on Federal Assistance for California While any and all federal assistance to California's budget situation would be welcome, some measures would benefit not only the State, but increase county government's ability to serve its residents and businesses. These include: Child Support Penalties — The State of California is currently out of compliance with federal requirements to automate the statewide child support system. While counties have no control over the statewide system, nonetheless the state chose to "shared" the penalty with local government as part of its FY 03-04 budget balancing strategy. Statewide counties paid $52.1 million in penalties(25%of the total $208 million). Contra Costa County paid $1.3 million. Food Stamp Error Rate Penalties — In California, counties administer food stamp programs on behalf of the state. Counties determine eligibility, calculate benefits and issue benefits to low income recipients in accordance with state regulations. Overall, California was not in compliance with federal quality control requirements set by a now defunct formula, repealed in 2002. California has been reducing its error rate and it is now below the national average. Nonetheless, California has been assessed a $114.3 million penalty for FFY 2001 and $62.6 million for FFY 2002. Contra Costa's share for FFY 2002 is approximately $297,000. While agreement has been reached to allow us to "reinvest" the penalty into program improvements, it will still increase county costs for the program, diverting scarce resources from other service priorities. State Criminal Alien Assistance Program (SCAAP) — SCAM" partially reimburses state and local governments for the cost of incarcerating undocumented immigrants convicted of a felony or multiple misdemeanors. Since immigration is a federal responsibility, states have maintained that these costs should be borne entirely by the federal government. Historically, SCARP reimbursements have only covered about 4011/o of state and local costs for incarceration and did not cover other criminal justice system costs such as apprehension, court, prosecution, public defender and probation. Despite this low level of funding, the federal program was cut in half this year. Contra Costa County is receiving $450,000 this year, compared to $900,000 the previous year. California as a whole received $95.3 million, of which $66 million was retained by the State of California. Advance Re-funding of Municipal Bonds — Current federal law permits state and local governments a single advance re-funding, of municipal bonds issued to finance government facilities for essential government functions_ S. 271 and H.R. 1076 would allow an additional advance re-funding. This could be a significant financial benefit to state and local government, depending upon the interest rate. For example, Contra Costa's bond for construction of the Regional Medical Center cannot be re-funded again under current law until the first call date, 2007. At current interest rates, re-funding could generate in excess of$600,000 a year in debt service savings. (Savings would vary, of course, based on actual interest rates.) Medical Care for the Uninsured — Counties act as the medical provider of last resort, providing a safety net to millions of legal and illegal immigrants as well as citizens without health care coverage. More federal support for these essential functions would be very helpful, since medical costs are one of the fastest growing components of expense for state and local governments. Congress is currently considering FFY 2044 appropriations, including Medicaid Disproportionate Share Hospitals (DSH) funding, reimbursement of undocumented immigrant medical costs, eligibility for legal immigrant pregnant women and children and other measures. The House version of the Medicare Prescription Drug bill (HR 1) provides full restoration of DSH funding, worth $104 million to California and $2.5 million to Contra Costa county, while the Senate version, S.1, does not. Conversely, the Senate version contains language re funding/eligibility on immigrant medical services. Ethanol Tax Allocations— Currently, the federal government taxes ethanol fuels at a much lower rate than other fuels and allocates a portion of it to its general fund. In response to water quality concerns, California is fazing out MTBE as a gasoline additive and replacing it with ethanol to achieve required air emission standards. Under the current ethanol taxing system, this substitution will reduce California's federal fuel tax receipts by approximately $600 million per year, of which over $500 million is designated for urban areas. This could have a significant impact on infrastructure maintenance and improvements, jobs and economic development. However, if all of the ethanol tax receipts were deposited into the Highway Trust Fund, not the Federal General fund, California's allocation would be likely to kept whole. Cather Measures Waive federal penalties for relative care under Title IV-E ➢ Increase the flexibility of Title IV-E options for local jurisdictions and minimize some of the risks associated with the 5 year block grant ➢ Relax Child Welfare Program Improvement Plan requirements Ensure continuity of Targeted Case Management(Title IX) and Title IV-E for dependent children ' Fully fund the Social Services Block Grant to congressional authorization levels ' .Enhance funding for the Elder Justice Act for activities that are currently the responsibility of the State and County Adult Protective Services or local law enforcement