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Judge: First 5 kids program doesn't have to give $1 billion to state

November 29, 2011 |  1:28 pm

First 5 ruling A judge has ruled in favor of county agencies that sued state officials over the California Legislature's budgeting decision to take $1 billion from a trust fund for preschool programs and spend it on healthcare for poor children.

The First 5 commissions of Madera, Merced and Fresno counties sued over the April passage of AB99, with seven other counties joining  the suit, saying that the transfer violated Prop. 10, a 1998 ballot measure that taxed tobacco products to raise money for early childhood development.

Under the 1998 measure, the First 5 commissions were charged with allocating the funds in each county to health and educational services for preschool-aged children. With the passage of the bill, the Legislature would have raided those funds to pay for state health programs.  

Legislative leaders argued that the shift of funds was necessary to address the state’s $26-billion budget crisis and was permitted under Prop. 10, which allowed the Legislature to amend it by a two-thirds vote if the changes "further the act and are consistent with its purposes."

The bill passed with a two-thirds majority, but the plaintiffs argued it was not consistent with the purposes of the act.

Fresno County Judge Debra Kazanjian ruled AB99 invalid. The ruling means that the First 5 commissions will not be required to send the money to the state by June 2012, as the bill would have required.

"To claim that transferring decision-making from local communities to the state Legislature is 'consistent with' Prop. 10 is like asking the court to find that black means white," she wrote in a Nov. 21 order.

The judge took the state to task for violating a provision that required that money from the trust fund "shall not be used to supplant state or local general fund money for any purpose" and pointed out that the Legislature could have chosen to raise revenue rather than cutting services to deal with the budget gap.

H.D. Palmer, a spokesman for the California Department of Finance, said state lawyers are reviewing the ruling and officials have not decided whether to appeal. In the meantime, he said the ruling will not affect the current year's budget. Because of the lawsuit, Gov. Jerry Brown did not include the disputed $1 billion in the state's revised budget in May.

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-- Abby Sewell

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