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County fast-tracks funds for early-childhood education to head off state take-back

By BRETT WILKISON
THE PRESS DEMOCRAT

Sonoma County supervisors have authorized more than $3.7 million in spending on early childhood development programs in recent weeks, a fast-track maneuver aimed at deflecting Gov. Jerry Brown’s proposal to use part of that cash to help balance the state budget.

Mike McGuire

The money comes from a special fund supported by a statewide 50-cent tax on tobacco products. Voters authorized the tax in 1998 to pay for early childhood education and health programs.

Yet under legislation signed by Brown in March, the local First 5 commissions that oversee that money would be forced to give up half of their fund balances — a total of about $1 billion — to help fill California’s budget gap.

In Sonoma County, that amounts to a loss of nearly $15.5 million. Sonoma County and at least seven other counties have filed a lawsuit against the state challenging AB 99, the law authorizing the funding shift.

In the meantime, the new and increased contracts are a way of committing some of that money before it can be taken away, the county’s First 5 leaders acknowledged.

“There are two choices,” said Supervisor Mike McGuire, who sits on the county’s nine-member First 5 commission. “Either the funds benefit children in Sonoma County, or the money allocated by voters to the county is reallocated into the state’s black hole of a budget.”

He called the proposed transfer an “unconstitutional raid.”

The Board of Supervisors is set to grant Rita Scardaci, the county’s Health Services director and a First 5 commission member, authority on Tuesday to sign another pair of First 5 deals. That action would bring the total figure on contracts authorized in the last four weeks to more than $4 million.

About $1.2 million of those contracts are budgeted in the current fiscal year, with the remainder accounted for in future years.

Sonoma County is not alone in its recent flurry of First 5 deals, according to state Department of Finance spokesman H.D. Palmer. He did not have an estimate for the number of such moves, which have not been widely reported. But he said they would not stymie the state’s fight to recoup the First 5 funds for the budget.

A test case may be the parallel fight over redevelopment money that broke out between the state and dozens of local governments earlier this year. Seeking to protect money eyed by Brown for the state budget, cities and counties fast-tracked approval of hundreds of redevelopment projects. Sonoma County government alone approved more than $22 million in projects so far this year.

It’s still unclear how those redevelopment decisions will hold up in court. And the recent moves on First 5 funding may have less power to stop any state grab, local and state officials said.

Under AB 99, money already committed to First 5 contracts would still be subject to the transfer.

Local programs would face no such threat, county First 5 leaders said.

In the county’s case, they said, the recent spending does not tap into the reserves that would be needed to foot the $15.5 million transfer if it is green-lighted. The fund is at nearly $31 million now, and nearly $15.5 million would remain this year if the shift happened, Scardaci said.

“We’re not trying to whittle it down so that money doesn’t exist,” she said.

First 5 leaders said that most if not all of the deals were envisioned in a 2009 strategic plan and that the recent contracts were not solely a tactical ploy against the state.

“This is spending that we were talking about doing all along,” said Jennie Tasheff, executive director of First 5 Sonoma County.

Nonetheless, the agency, which supports programs that serve about 11,000 needy and at-risk children and nearly 10,000 parents, shows no signs it intends to cut or slow spending in the face of the state proposal, as have other jurisdictions.

Local First 5 leaders gave two reasons for that strategy. First, they said they have enough money to continue at current spending levels until either mid-2017 if the state transfer plays out, or until mid-2022 if it doesn’t. Currently, the commission pays out about $4.5million each year in contracts and programs while taking in about $4million in tax revenue.

Other commissions may not have such a cushion with their reserves, the First 5 leaders said.

“If we were a commission that had fewer dollars, we would have to cut to come up with the money the state is asking for,” Tasheff said.

The second reason, leaders said, is there are no guarantees the state won’t seek the other half of the First 5 reserves at a later date.

“Either half of them or all of them. That potential exists,” Scardaci said.

A compromise may be brewing in the state Assembly, where a proposal that would roughly halve the First 5 funding shift, to $550 million, is moving through a budget subcommittee.

A meeting of First 5 leaders on Monday will focus partly on that proposal, which officials suggested might find some support statewide. Otherwise, First 5 leaders said, their stance on state measures remains guarded.

“It’s certainly a wake-up call of concern,” Scardaci said.

Contact Staff Writer Brett Wilkison at 521-5295 or brett.wilkison@pressdemocrat.com.





5 Responses to “County fast-tracks funds for early-childhood education to head off state take-back”

  1. Michele says:

    Ruben,

    I don’t know where you come up with your information but having been involved with First 5 locally since the very beginning, I’d like to set the facts straight. And no, I’m not on the Commission.

    The local planning process took about a year – and the decision was made to use about 60% of the money immediately for children’s programs and 40% would go into the bank. The reason for this is that it was/is expected that smoking would drop off, thereby dropping off the income to these programs. The Commission wanted to have a way to plan long-range to sustain these programs. Sonoma County does not receive $15M a year – so your assertion that the $30M reserve came from a two year delay is simply wrong. Essentially, prudent, long-term planning has resulted in that money being attractive to the Governor and is being raided.

    Your other assertions are equally flawed, if you look at the actual spending in Sonoma County. I won’t list them all but one seems important to bring out. First 5 has developed a medical insurance product to cover any child 0-5 who isn’t eligible for some other medical insurance program. The coverage is FREE and includes dental and MH. They’ve made a commitment that no child 0-5 will go uncovered. So tell me again how First 5 is “letting children die?”

    I’m not saying that funding via initiative is the right way to do things. But locally, First 5 has been a very good thing for the children in our community.

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  2. Kim says:

    Interesting perspective Ruben. While I’m not versed on Prop 10 as well as you (other than I voted against it), your reasoning seems to hold water with me. Your first comment also is so very true. ;-)

    Prop 10 should be the poster child to what is wrong with voting to impliment taxes on anything. Eventually, down the pike, that money is going to be diverted for unintended use and what the voters voted for. The state legislature isn’t going to oppose ANY tax measure on the ballot, they know they’ll be getting their claws into it eventually.

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  3. RubenStutter says:

    Also, First 5 already gave them $133 million last year, and Medi-Cal is spent LOCALLY so it is not true to imply that the funds would be lost.

    But here’s what every voter should know about First 5:

    Unlike EVERY OTHER organization in CA, First 5 has a legal exception to the conflict of interest law – that means people sitting on their Commission Boards can and generally DO receive the lion’s share of the funds (Oh yes they DO!!!). That’s why they are suing. It’s not to preserve what they claim the voters intended, it’s to preserve their own personal pet programs.

    “Karen Scott, executive director of First 5 San Bernardino, said her commission has no litigation plans.” Why? one might ask… perhaps this quote from another Executive Director is why: From Contra Costa’s February minutes: ” Sean Casey: We don’t have any real argument against it which is why we’re really stressing the other piece. Sure, take the money…”

    So add to that Rob Reiner, the originator of Prop 10, supports the $1 billion move – if he thought it were illegal, he’d be up in arms (and he is not) so why sue since the law allows the move?

    Well, this way the commissioners get to spend as much OF THE TAXPAYERS’ money as they want to try to save funds for mainly THEIR OWN agencies.

    This IS what happens when you write into a law that the foxes can guard and eat from the hen house – and the Prop 10 law does just that.

    At least the state is not willing to let poor kids DIE. The First 5 Commissioners, on the other hand, are fighting to do just that.

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  4. Reality Check says:

    It is fun to watch Democrats race one another to see who can spend money faster. When the last dollar is spent, will someone please turn out the lights.

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  5. RubenStutter says:

    The reason they have reserves is because they took two years+ to come up with a plan to spend the money. It wasn’t prudent planning; it was incompetent implementation.

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