O.C. Officials Fear Effects of State Plan

As the state struggles to close its budget gap, it may be wrenching one open for Orange County and other local governments, officials warned Thursday.

“This is scary,” Supervisor Don R. Roth said after Gov. Pete Wilson unveiled his latest budget proposal in Sacramento. “None of this is good.”

Roth and other county officials noted that complete details of the budget and its local impact will not be clear for days, perhaps even weeks. But the outlines of it emerged Thursday and quickly touched off concern.

The governor’s budget, if adopted, would shift responsibility to county governments for $2.3 billion worth of mental health and public health services and care for senior citizens and the indigent.

In return, the state would funnel proceeds from a temporary half-cent increase in the sales tax to counties and would give boards of supervisors authority to raise it even further provided county voters approved.

Wilson’s proposal also recommends trimming support for Aid to Families with Dependent Children by $61 per month. In Orange County, where such aid already falls short of what many need to find adequate housing, those cuts could be especially painful. Nearly 70,000 people in Orange County receive AFDC, currently providing them with $694 per month.

Those people, among the county’s poorest residents, would feel the most direct impact of the proposed budget, but indirectly it would affect thousands more, county officials said.

In the short term, public health and mental health services might not suffer, but many worry that they could in future years if county residents balk at higher taxes to support them. That would leave county supervisors with hard choices and could result in cuts to those programs.

“Financially, what does this do to the rest of the county?” said Karen Davis, manager of the county’s financial and management planning office. “We’d be concerned that other county programs could be depleted if we’re mandated to provide and fund these services.” As a result, while the governor’s budget relieves the state of $12.6 billion in projected shortfalls, it could create a host of financial and political quagmires for local government and the services it provides.

What concerns many of the local officials is that they might receive the responsibility for administering costly new programs, only to have voters reject the tax increases that would pay for the cost of continuing to support them. County supervisors would then have to choose between cutting support for health care or trimming other services that they administer, such as law enforcement or environmental management.

“I don’t want any more authority to raise taxes,” said Roth, who has led other board members in recent budget debates. “That’s how to get recalled or not elected.”

Nor is cutting popular programs an appetizing alternative. “I’m going to end up having meetings up here and pickets and people saying ‘Throw the bums out,’ ” he said.

Supervisor Harriett M. Wieder also expressed concern, noting through a spokeswoman that she wanted to review the budget to see whether it had guarantees that programs being transferred to the counties would be fully funded if the state intended to require them.

“No money, no mandates,” Wieder said.

Roth noted that the prospect of higher sales taxes statewide could hurt local efforts to raise revenues for projects through local sales tax increases. Measure J on the May 14 ballot, for instance, seeks to raise Orange County’s sales tax to 7% to fund construction of jail facilities to relieve overcrowding. If approved, the 30-year levy would raise an average of $343 million annually, according to one study. Although the latest Times Orange County Poll shows strong support for Measure J, opponents say the specter of higher state taxes will help defeat the measure.

Even if voters approved a half-cent sales tax to pay for such programs as public and mental health, some officials worry that revenues from a sales tax might not keep pace with the spiraling cost of health care.

The county’s already strapped budget has little room to accommodate rapidly escalating new costs, so the guarantee of state funding is crucial to many local officials.

“If they’re going to shuttle these programs off on the counties, they have to come up with a solid, reliable source of funding,” said Ronald R. Diluigi, assistant director of the county Health Care Agency. “That revenue source has to keep pace with any increasing costs, or there’s going to be a problem.”