LET'S USE BILLIONS IN UNUSED "FIRST FIVE" FUNDS IN ADDRESSING STATE BUDGET SHORTFALL
An exclusive column from State Senator Dave Cox.
May 27, 2008
[Publisher's Note: As part of an ongoing effort to bring original, thoughtful commentary to you here at the FlashReport, I am pleased to present this column from California State Senator Dave Cox -- Flash]
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In 1998, California voters passed Proposition 10 which placed an additional tobacco tax on the ballot for the purpose of providing funding for early childhood development.
California has now had ten years of experience with Proposition 10 and the 59 First Five Commission bureaucracies that it created.
In that time period, there have been two state audits, multiple county grand jury reports, and numerous media and editorial criticisms of Proposition 10.
During the process of the second state audit, Chairman Rob Reiner resigned from the State First Five Commission and its executive director refused to testify before the Joint Legislative Audit Committee on the advice of counsel.
It is time to re-direct and maximize both the $580 million revenue stream provided by Proposition 10 and the obscene $2,447,338,951 in fund balances found in the 58 County First Five Commissions and the State Commission.
Yesterday, I put forward legislation that proposes to do just that.
Using taxpayer dollars to fund singing and music circles, fun days, Italian immersion programs, and marketing campaigns “designed to shift public opinion regarding acceptance and inclusion of LGBT families” should not be a higher priority than providing health coverage for kids, funding education or maintaining local government services such as keeping cops on the streets.
An outline of the proposal follows.
You can find supporting documents on my
Senate website.1. PROPOSAL COVERS CALIFORNIA’S KIDS
The proposal commits future Proposition 10 revenues to California’s Healthy Families Program (HFP) and California’s Medi-Cal Program.
This will provide long-term stability to the existing Healthy Families Program and allow for adequate funds to cover the additional 200,000 kids that are currently eligible for, and not yet enrolled in, California’s HFP.
The annual revenue stream from Proposition 10 is approximately $580 million.
California’s General Fund expenditures for HFP are currently budgeted at $425 million.
Federal funding for HFP is generally provided with a two-to-one federal/state matching ratio.
Approximately 200,000 additional children (0-18) are eligible, but are not yet enrolled in HFP.
Enrolling these children would require about $84 million from the General Fund, assuming continuation of current federal/state sharing ratios.
The ongoing revenues from Proposition 10 will allow California to cover all eligible children.
Any additional funding could be utilized to address ongoing needs in the Medi-Cal Program.
By freeing up existing General Fund resources committed to California’s Healthy Families Program, the Legislature and the Governor will gain much needed flexibility to address California’s healthcare issues.
As an example, resources presently committed to HFP could be utilized to offset the current and proposed Medi-Cal provider-rate reimbursement reductions.
In future years, these resources could be utilized to increase Medi-Cal provider-rate reimbursements.
2. PROPOSAL BLOWS UP BOXES AND BANISHES BUREACRACY
The proposal, if placed on the ballot by the Legislature and approved by the voters, would eliminate the 58 County Children and Families (First Five) Commissions and the State Children and Families Commission.
59 bureaucracies and their associated overhead costs would be eliminated, thus increasing the funds available for children’s healthcare.
Additionally, there would no longer be a need for the First 5 Association of California that projects membership dues from the 58 county commissions to be $321,304.00 for 2008-09.
3. PROPOSAL PROVIDES SIGNIFICANT FISCAL RELIEF TO LOCAL SCHOOLS AND LOCAL GOVERNMENTS
The proposal would direct all unencumbered funds in the accounts of the 58 County First Five Commissions to schools and local governments.
50% of all funds unencumbered as of the date that the measure is approved by the voters on the next statewide ballot will be distributed to school districts within each respective county.
This funding could be utilized for one time expenditures by local school districts or to backfill for shortfalls related to current programs.
The remaining 50% of all funds would go to the County General Funds and the City General Funds of those cities within each county.
This would provide for all funds unencumbered as of the date the measure is approved by the voters on the next statewide ballot to be distributed to the local jurisdictions.
The distribution for the local government funding would involve a formula that provides for 50% of the fund balances to go to each respective County and 50% of the fund balances to be divided on a per-capita basis to each City within the respective county.
In a difficult fiscal environment, this proposal will provide for immediate fiscal relief for California’s counties and cities.
The June 30, 2007 audited financial statements of the 58 County First Five Commissions showed a combined reserve balance of $2,079,348,825.
4. PROPOSAL PROVIDES SIGNIFICANT STATE GENERAL FUND RELIEF
The proposal would direct all unencumbered reserve funds from the State Children and Families Commission be directed to the State General Fund for deficit reduction.
As of June 30, 2007, the State Commission held $367,990,126 in reserves.
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Senator Dave Cox represents the residents of the First Senate District, which includes all or portions of Alpine, Amador, Calaveras, El Dorado, Lassen, Placer, Plumas, Modoc, Mono, Nevada, Sacramento and Sierra Counties.
