Marisa Lagos,Rachel Gordon, Chronicle Staff Writers

Sunday, January 10, 2010

(01-10) 04:00 PST Sacramento —

Gov. Arnold Schwarzenegger has demanded more federal dollars to help balance the state’s budget, but local officials say he also sent a clear message to cities and counties throughout California: The state is coming for your money, too.

Included in the governor’s proposal to bridge a $20 billion budget gap are measures that could strip more than $1 billion in transit funds from local jurisdictions, put more inmates in already overcrowded county jails, and require counties to pay more for child welfare and care for blind, disabled and elderly people.

“He seeks to shift state problems to counties in the areas of health and human services, transportation and criminal justice,” said Paul McIntosh, executive director of the California State Association of Counties. “The impacts will be real. It would blow a hole in an already frayed social service safety net and push families deeper into poverty.”

Gearing up for fight

Officials representing city and county governments are gearing up to fight the governor’s plan, which was unveiled Friday. They said the effect of his proposals would be twofold: Local jurisdictions would have to take on more costs now borne by the state; and proposed cuts to state-funded social programs could devastate local services already under stress because of the recession.

Frank Mecca, executive director of the County Welfare Directors Association, said Schwarzenegger’s plan to cut 87 percent of recipients out of an in-home care program and decrease the amount the state pays the program’s workers could leave thousands of caregivers unemployed and lead to pay cuts for those who still have jobs.

If counties don’t go along with pay cuts for in-home care workers, he said, they will be forced to slash other programs to cover the costs.

Higher jail costs

Any money saved at the local level by the in-home care cuts will be gobbled up by the cost of paying for the child welfare program that Schwarzenegger is also proposing to slash, Mecca added.

“Not to mention the harder-to-quantify social cost of having more families homeless,” he said.

Another issue for counties will be incarceration costs, as Schwarzenegger is proposing to cut an AIDS drug program for county jails and to let some nonviolent offenders serve their terms in county jails instead of state prisons.

Matthew Cate, head of the state Department of Corrections and Rehabilitation, acknowledged Friday that the proposal to shift inmates to local jails would burden sheriff’s departments with extra costs. It could also force counties to do something state lawmakers have been unwilling to do: turn some prisoners loose early.

A similar proposal to transfer inmates from prisons to county jails was killed by the Legislature last year.

Fuel-tax change

Local transit operations also would be hit hard by Schwarzenegger’s budget. The governor wants to eliminate the sales tax on gasoline and diesel fuel, which helps fund Muni, BART, AC Transit, Caltrain and other transit systems.

To recoup the more than $1 billion that the sales tax on gas now raises, Schwarzenegger would raise an excise tax on fuel. That would allow the state to sidestep an October court ruling that prohibited the continued diversion of gas sales tax funds away from public transit.

H.D. Palmer, a spokesman for Schwarzenegger’s Finance Department, argued that the tax swap won’t hurt transit agencies because they are guaranteed to get the same amount of money next year as they receive now.

Also, he argued, transit agencies have been receiving unusually high sums from the sales tax in recent years because of spikes in gas prices.

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