Wednesday, April 14, 2010

Well, California...Are you Paying Attention?

  The other day as I was reading the news and some of the political blogs I follow I found this from the Legislative Analysis Office of the State of California. What is the LAO you might ask? Apparently they go through items on the Governor's proposed budget and say whether or not the item can ,or should be done. A surprise to me was that they would then suggest changing how an item was to be put on the budget, or hidden as an "off-budget" item.From the LAO dated March1,2010 (all bolding will be found in original unless stated otherwise)
Governor’s Proposed Budget-Balancing Solutions Largest Budget Solutions Involve New Alternative Revenue Sources. The primary budget balancing solutions proposed by the Governor in the resource area involve new revenue sources to replace General Fund support for (1) state parks and (2) wildland fire protection and emergency response.
  Looks like the way to "balance" a budget is to remove items from the budget, then you don't have to worry about them...You still have to pay them, but so what?

 Well, one big item here caught my eye, CalFire...

  At first glance, it didn't seem too bad, CalFire was asking for a 10% increase to their budget from $200Mil to $220Mil. Not too bad, but why is any California bureaucracy asking for an increase to their budget when the State already has a $20 Billion(and growing!) budget shortfall? My guess is that every "department" in California has done the same.( I haven't yet had time to look through the Governor's complete proposed budget, but the few departments I have had time to check have done just that...surprised? not!)

 Back to CalFire...It seems that that $20 Mil increase just wasn't enough for them...Nor was the "old" emergency fund that they have used in the past. From the LAO:
The budget includes a reduction of $33 million for emergency fire suppression, reflecting an estimate that a lower level of resources will be needed in the budget year following a high level of spending on firefighting activities in the current year significantly beyond the amounts initially budgeted. Still, even with this decrease, the $223 million from the General Fund proposed for emergency fire suppression in 2010-11 is the largest amount ever initially proposed in the Governor’s budget plan. (bolding mine)
...the budget reflects two major funding shifts in the resources area for the budget year: (1) the replacement of $140 million General Fund support in the Department of Parks and Recreation (DPR) with new revenues from the proposed Tranquillon Ridge oil and gas lease agreement and (2) the replacement of $200 million General Fund support in the Department of Forestry and Fire Protection (CalFire) with new revenues from a proposed surcharge on property insurance premiums statewide.(bolding mine)

  So what have we got here... looks like money to come from a oil and gas lease...can we say Santa Barbara County?...that money will never happen!

  Next we have a shift from monies accountable from the general fund, and a part of the governor's budget being shifted off budget as a "special" new revenue from a proposed surcharge. In addition we find...

Current Emergency Fund Budgeting Practice at Odds With Original Legislative Intent.

The CalFire has access to an Emergency Fund (commonly referred to as the E-Fund) that was intended originally to pay for large-incident firefighting costs. We are concerned about the expanded use over time of the E-Fund by the department—in particular, its practice of charging day-to-day operating costs not related directly to a large incident to the fund. We make recommendations to establish stronger fiscal controls on the use of the E-Fund so as to improve legislative oversight of the department’s expenditures. (bolding in original)

  So, it looks like we have a Department that has been mis-using the Emergency Fund they already have, and now the Governor wants to shift the responsibility for that fund from the Legislature to the folks who have been mis-managing it...Oh, and at the same time effectively remove $200Million from the budget the legislature has to approve....

 Sleight of hand, anyone?

  Oh, and then there's this!(add a New and Improved Emergency Response Initative!(to the tune of an additional $175 Million!!)

Governor’s ER I and LA O’s Fee Alternative
The Governor’s budget includes ERI—a proposal to levy a new surcharge on all property insurance policies statewide.
This would have been a surcharge on all property owner's insurance policies to the tune of 4.8% of the premium of every insured. The LAO said that the governor can not do this as it is a tax and not allowed under Prop 98. They the LAO proceeded to "hide" the tax by recommending that it be called...

....enactment of a new wildland fire protection fee.

State Is Responsible for Wildland Fire Protection.

Under existing statute, the state is responsible for providing wildland fire protection in State Responsibility Areas (SRAs). These SRAs encompass

about 31 million acres of the state, primarily privately owned timberlands, rangelands, and watershed areas. There are an estimated 860,000

homes in SRAs. Initially, CalFire’s mission was the prevention and suppression of wildland fires in undeveloped areas. Over time, however, there

has been considerable “mission creep” and the department now spends considerable time and resources protecting homes in SRAs from wildfire,

as well as responding to medical emergencies and other non-wildfire calls.
  Oh, where to start, where to start! How about SRAs ~

State Responsibility Areas ~ those are the following...

The State Board of Forestry identifies those lands where the California Department of Forestry and Fire Protection has the primary duty for wildland fire prevention and suppression.(from the Office of the State Fire Marshall)

  So, you would think that CalFire has responsiblity for wildlands, correct? But as many as you probably know CalFire is also used by most counties in California as the COUNTY Fire Department. So, are those counties now a State Responsibilitity Area, do they become one under these new "fees"? What are those counties and cities that contract with CalFire for Fire Protection already paying to Calfire? I don't have all those numbers, but I do have the City of Redlands bill from CalFire for 2009-10(PDF see pg 8). Every city or county that uses CalFire is paying at the rate of $19.11/ac/per year now. Are they considered a SRA? Is this put into CalFire's budget,or is it dumped into the General Fund?

  Back to the LAO's recommendation...

 We recommend that the Legislature enact a fee on the owners of structures in SRAs that would be proportional to the additional costs imposed on the state as a result of the presence of those structures.
 What additional costs if those structures are in a county that already has a CalFire presence? Looks like the State is already collecting for the presence of those structures...
 BUT, it gets worse! CalFire in addition to wanting to shift responsibility for the emergency fund(s) to themselves also has a request for $800,000,000. in the "regular"Budget... in Lease Revenue Bonds to replace or rebuild approximately 48 fire stations. These are Bonds that do not come out of the General Fund either, and do not require a vote by taxpayers to be approved. This is a real slight of hand folks. What happens is CalFire (and the State) will mortgage their own buildings to themselves, and then "lease" the buildings back to themselves. The "mortgage" will be financed with taxfree bonds. CalFire will make the "lease" payments from monies from their original "budget" approved by the legislature as General Fund items. But, where does the "mortgage" money come from...the sale of non-taxpayer approved bonds that are not considered "constitutional debt". They get an even lower rating than California's General Fund Bonds which do have to be approved by voters. These bonds cost the state on average $2+ dollars for every $1. But they don't show on the Budget as State debt!
  Like I said earlier, CalFire isn't the only government entity doing this. In the short time I've had to look, it seems the Highway Patrol wants to add a cool Million to their budget this year, and the UC system wants $50Million in Lease Revenue Bonds also in addition to whatever they asked for in the budget!(you remember those bonds not approved by voters, or considered constitutional debt)
  Ok folks, I'm flustered here..Enough to start writing a blog besides the one my dog has! What do we do about this? And is this how our state operates? Hidings expenses, moving stuff off-Budget, and then making up new fees to cover things they've hidden from the "budget? If this wasn't government these folks would be in jail for fraud!
 I don't have time to catch all these little tricks, but the CalFire example should be stomped on! Anybody want to help?

No comments:

Post a Comment