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County supervisors threaten to withhold tax revenues

February 3, 2009 |  1:38 pm

Gloriamolina Grappling with a state budget stalemate that has left them $105.6 million in the hole this month, Los Angeles County supervisors this morning threatened to withhold tax revenues from the state to pay for local social services.

“We’re declaring our own Boston tea party,” Supervisor Gloria Molina said at this morning’s board meeting, adding that withholding money from the state would send a message to state legislators to take immediate action and "make their pain more acute.”

Supervisors directed the county's auditor controller, its CEO, William T  Fujioka, and county counsel to explore the legality of withholding money -- including reimbursements and property and sales tax revenue -- from the state. The board plans to reconsider the option during closed session next week.

“It’s a delicious idea,” Supervisor Zev Yaroslavsky said. “It may be deliciously illegal, but I think the state’s action may also be illegal.”

The state controller delayed $105.6 million in health and human services payments to Los Angeles County for at least a month, and the supervisors voted to cover those payments with reserves.

Supervisors have said they will be unable to cover the shortfall if Gov. Arnold Schwarzenegger follows though with plans to defer an estimated $1.4 billion in state payments to the county for welfare and other social services over the next seven months.

The county already had to transfer $29.1 million from county reserves last month to cover an upsurge in welfare and construction costs, and supervisors have said they may have to cut services and jobs next month if state lawmakers do not take action.

Molina and other supervisors said they are not receiving any new information about budget negotiations from Sacramento and have few answers for worried constituents and officials at agencies such as county-funded day-care centers.

“If they can defer our money, why can’t we withhold theirs?” Supervisor Don Knabe, who chairs the board, said of the state.

Knabe and Supervisor Michael Antonovich said the county should try to withhold the money to cover programs the state has delayed funding.

“If it’s legally possible, we ought to use all resources possible to protect the public safety of Los Angeles residents,” Antonovich said.

County Counsel Ray Fortner said he has been researching the legality of the county withholding money “for some time” but could not say yet whether it would be legal for supervisors to do so under the circumstances.

-- Molly Hennessy-Fiske

Photo: L.A. Times