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JTF StateCountyFiscalJTF

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object(Timber\Post)#3742 (44) { ["ImageClass"]=> string(12) "Timber\Image" ["PostClass"]=> string(11) "Timber\Post" ["TermClass"]=> string(11) "Timber\Term" ["object_type"]=> string(4) "post" ["custom"]=> array(5) { ["_wp_attached_file"]=> string(28) "JTF_StateCountyFiscalJTF.pdf" ["wpmf_size"]=> string(6) "108775" ["wpmf_filetype"]=> string(3) "pdf" ["wpmf_order"]=> string(1) "0" ["searchwp_content"]=> string(5818) "November 2011 www.ppic.org THE STATE -COUNTY FISCAL RELATIONSHIP IN CALIFORNIA Caroline Danielson and Marisol Cuellar Mejia  Counties deliver both statewide and local services. California’s c ounties have three primary responsibilities, delegated to them by the state. First, they serve as agents of the state in administering statewide health and socia l services programs . Second, they carry out other designated countywide functions, including public safety, public works and elections . Third , in unincorporated areas they deliver local services that would otherwise be provided by cities (for example, polici ng, parks and garbage collection). About 35 % of all state and local government workers in California ( excluding those involved in education ) are employed by counties .  Revenue transfer s from other levels of government account for a substantial share of county budgets . Almost half of county revenues come from the state and federal governments (28.8% and 19.1%, respectively). Of the revenues originat ing within counties, property taxes account for the largest share (20.8% of total revenues). On the expenditure side, California counties spent $56.7 billion in 2008– 09, with the two largest spendin g categories — p ublic protection and public assistance—each accounting for somewhat over a quarter of total county expenditures .  Over the years, c ounty fiscal authority has diminished … Although p er capita expenditures by counties have grown ( by about 10% in the past decade alone), counties have relatively little discretion over how they spend their revenue s. F or the most part, state and federal revenue transfers are designated for specific programs (with counties required to contribute an additional share) . Moreover, Proposition 13 in 1978 led to a sharp reduction in p roperty taxes, the primary source of discretionary count y revenues . Proposition 13 not only limited property taxes ; it also transferred control over their allocation to the state government —a responsibility which had earlier rested exclusively with local governments . Th is situation disproportionately affected certain county services , in particular those for which the counties did not receive compensatory funding from the stat e (for example, libraries ). In addition , state allocation mechanisms do not always keep up with changing county demographics .  … while state-county fiscal relationship s ha ve become more complex . L egislation subsequent to Proposition 13 provided counties with state revenue in compensat ion for their l ost property tax revenues . Later legislation and propositions have repeatedly modified the state -local fiscal relationship. In 1991, counties gained new revenues from the state in return for taking on additional responsibilities in certain health and social services programs. However, more typical were shifts in the amounts or sources of revenues. For example, i n 1993 Proposition 172 added a half c ent to the sales tax to fund local public safety programs . A 2004 swap increased property tax revenues to counties and other local governments in exchange for revenue reductions from other sources . And in 2004, Proposition 1A limited the state’s ability to redirect property taxes away from local governments .  The state has increased c ounty responsibility for certain programs , beginning in 2011–12. The latest shift in the state -county fiscal relationship involves significant new responsibilities for the counties . The state has mandated that, b eginning in October 2011, counties are to incarcerate and rehabilitate certain low-level offenders who earlier were a state responsibility . In addition, m ost aspects of C hild Welfare Services and Adult Protective Services, as well as some mental health and drug and alcohol programs , have now become county responsibilities . The state will retain an oversight and compliance role, and counties must continue to adhere to federal law and r egulations. Currently , funding for these new r esponsibilities is coming from dedicated portion s of sales tax revenues and vehic le license fees . THE STATE-COUNTY FISCAL RELATI ONSHIP IN CALIFORNIA November 2011 www.ppic.org About half of county revenues come from th e state and federal government s About half of county expenditures support public protection and public assistance programs Notes: Percentages are based on 2008 –09 statewide total county revenues and expenditures, excluding the City and County of San Francisco. Federal revenues include a small percentage of local intergovernmenta l transfers. “Other sources ” include s special benefit assessments; licenses, permits, and franchises; fines, forfeitures, and penalties; revenue from the use of money and property; and miscellaneous . County revenue sources have shifted substantially over time Note: Only the top three count y revenue sources shown . Sources: Counties Annual Financial Reports, California State Controller’s Office; U.S. Bureau of the Census Annual Survey of Public Employment and Payroll. Contact: danielson@ppic.org Supported with funding from the S.D. Bechtel, Jr. Foundation and The James Irvine Foundation. 0% 5% 10% 15% 20% 25% 30% 35% 40% Realignment (1991), " ERAF shift" (1992), Prop. 172 (1993) VLF property tax swap and sales tax triple flip (2004) Prop. 13 (1978) State Federal Property tax 1.1% 2.6% 5.8% 10.3% 11.5% 19.1% 20.8% 28.8% Other financing sources Other county taxes Other sources Charges for current services Enterpriseactivity Federal Property tax State 0% Revenues (55.9 billion $) . 1.7% 2.7% 3.3% 8.6% 13.4% 15.7% 26.2% 28.4% 0% 10% 20% Other Debt service Public ways and facilities General Enterprise/activity Health and sanitation Public assistancePublic protection Expenditures (56.7 billion $)" } ["___content":protected]=> string(134) "

JTF StateCountyFiscalJTF

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California’s c ounties have three primary responsibilities, delegated to them by the state. First, they serve as agents of the state in administering statewide health and socia l services programs . Second, they carry out other designated countywide functions, including public safety, public works and elections . Third , in unincorporated areas they deliver local services that would otherwise be provided by cities (for example, polici ng, parks and garbage collection). About 35 % of all state and local government workers in California ( excluding those involved in education ) are employed by counties .  Revenue transfer s from other levels of government account for a substantial share of county budgets . Almost half of county revenues come from the state and federal governments (28.8% and 19.1%, respectively). Of the revenues originat ing within counties, property taxes account for the largest share (20.8% of total revenues). On the expenditure side, California counties spent $56.7 billion in 2008– 09, with the two largest spendin g categories — p ublic protection and public assistance—each accounting for somewhat over a quarter of total county expenditures .  Over the years, c ounty fiscal authority has diminished … Although p er capita expenditures by counties have grown ( by about 10% in the past decade alone), counties have relatively little discretion over how they spend their revenue s. F or the most part, state and federal revenue transfers are designated for specific programs (with counties required to contribute an additional share) . Moreover, Proposition 13 in 1978 led to a sharp reduction in p roperty taxes, the primary source of discretionary count y revenues . Proposition 13 not only limited property taxes ; it also transferred control over their allocation to the state government —a responsibility which had earlier rested exclusively with local governments . Th is situation disproportionately affected certain county services , in particular those for which the counties did not receive compensatory funding from the stat e (for example, libraries ). In addition , state allocation mechanisms do not always keep up with changing county demographics .  … while state-county fiscal relationship s ha ve become more complex . L egislation subsequent to Proposition 13 provided counties with state revenue in compensat ion for their l ost property tax revenues . Later legislation and propositions have repeatedly modified the state -local fiscal relationship. In 1991, counties gained new revenues from the state in return for taking on additional responsibilities in certain health and social services programs. However, more typical were shifts in the amounts or sources of revenues. For example, i n 1993 Proposition 172 added a half c ent to the sales tax to fund local public safety programs . A 2004 swap increased property tax revenues to counties and other local governments in exchange for revenue reductions from other sources . And in 2004, Proposition 1A limited the state’s ability to redirect property taxes away from local governments .  The state has increased c ounty responsibility for certain programs , beginning in 2011–12. The latest shift in the state -county fiscal relationship involves significant new responsibilities for the counties . The state has mandated that, b eginning in October 2011, counties are to incarcerate and rehabilitate certain low-level offenders who earlier were a state responsibility . In addition, m ost aspects of C hild Welfare Services and Adult Protective Services, as well as some mental health and drug and alcohol programs , have now become county responsibilities . The state will retain an oversight and compliance role, and counties must continue to adhere to federal law and r egulations. Currently , funding for these new r esponsibilities is coming from dedicated portion s of sales tax revenues and vehic le license fees . THE STATE-COUNTY FISCAL RELATI ONSHIP IN CALIFORNIA November 2011 www.ppic.org About half of county revenues come from th e state and federal government s About half of county expenditures support public protection and public assistance programs Notes: Percentages are based on 2008 –09 statewide total county revenues and expenditures, excluding the City and County of San Francisco. Federal revenues include a small percentage of local intergovernmenta l transfers. “Other sources ” include s special benefit assessments; licenses, permits, and franchises; fines, forfeitures, and penalties; revenue from the use of money and property; and miscellaneous . County revenue sources have shifted substantially over time Note: Only the top three count y revenue sources shown . 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