1. California State Association of Counties May 2010 Governor’s 2010-11 May Revision The Not-so-Good, the Bad, and the Ugly

2. California State Association of Counties May 2010 Overview Combined $19.1 billion gap for 2010-11 $7.7 billion in 2009-10 $10.2 billion in 2010-11 Includes $1.2 billion reserve Continued reliance on federal funds Majority of “solutions:” $12.4 billion in spending reductions Outright program eliminations will have significant impact on counties and citizens we serve

3. California State Association of Counties May 2010 January budget proposal May Revision Total% Expenditure Reductions $ 5,844.5$ 6,523.4$ 12,367.964.6% Federal Funds1,067.01,414.23,382.017.7 Alternative Funding 1,025.9252.41,278.36.7 Fund Shifts & Other Revenue 477.11,636.52,113.611.0 TOTAL$ 9,315.4$ 9,826.4$ 19,141.8100% Proposed Budget Solutions (dollars in millions)

4. California State Association of Counties May 2010 Notable Responses Governor: No budget signed without inclusion of budget and pension reforms Republicans: No-tax-increase budget is good starting point Democrats: Governor’s proposal to choose tax breaks over the children and elderly unacceptable; realignment of program responsibility and revenue authority is the answer

5. California State Association of Counties May 2010 Health and Human Services Outright elimination of CalWORKs, beginning 10/1/2010 Redirection of $602 million in Realignment funding for local mental health programs to social services; significant new sharing ratios for Child Welfare & Food Stamps Administration Redirection of nearly $1 billion in “county savings” Suspension of AB 3632 mandate Medi-Cal savings focused on cost sharing

6. California State Association of Counties May 2010 Corrections/Public Safety Counties to detain state prison inmates sentenced to felony terms of 36 months or less Counties would receive $11,500/inmate to cover probation programming, services, and alternative custody options Transfer of responsibility to counties for supervision of juvenile parolees (those exiting a state DJJ facility) Continuous appropriation of $502.9 million for local public safety subventions (now funded through VLF) beginning in 2011-12 Commitment of $300 million additional in lease-revenue bond authority for local juvenile detention facility construction Increased fee to fund court security

7. California State Association of Counties May 2010 Transportation No further cuts to transportation following March transportation tax swap Borrowing of $650 million in HUTA to be repaid in June 2013 One-time loan Reflects redirection of funds unallocated in March fund swap No impact on transportation programs

8. California State Association of Counties May 2010 Government Finance and Operations Continued commitment to provide $68.2 million in reimbursement for county costs associated with May 2009 Special Election No change from 2009-10 budget and January 2010-11 budget proposal to suspend almost all mandates

9. California State Association of Counties May 2010 Agriculture and Natural Resources No funding for Williamson Act Restoration of $140 million to state parks, replacing funding previously committed through now-withdrawn Tranquillon Ridge (oil drilling) Continued advancement of Emergency Response Initiative: 4.8 percent surcharge on all residential and commercial property insurance statewide to fund CALFIRE; assumes 7/1/10 implementation

10. California State Association of Counties May 2010 Response and Next Steps Governor’s opening salvo sets stage for potentially long summer Legislature will begin budget subcommittee hearings this week Next Steps: CSAC focusing efforts on framing discussion on realignment and ensuring county voice is heard Will roll out communications and advocacy strategies in coming days and weeks Here to support local efforts to educate public and lawmakers about budget impacts