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L.A. supervisors to sue to block state budget cuts; other local governments expected to join

July 21, 2009 | 11:14 am

The Los Angeles County Board of Supervisors voted to sue state lawmakers if they pursue plans to seize local redevelopment and highway taxes to cover the state budget deficit. Other local governments are expected to take similar actions to prevent major cuts proposed in the budget deal reached last night.

This morning, Supervisors Don Knabe and Zev Yaroslavsky proposed that county counsel sue to block any effort by the state to illegally withhold gas taxes or extend redevelopment projects, effectively redirecting taxes from the county to the state.

All of the supervisors approved the proposal except Supervisor Mark Ridley-Thomas, who was absent. “You’d think they’d be making better decisions than this,” Supervisor Gloria Molina said.

If the county sues to block the state from extending redevelopment projects, it will likely trigger a provision in the proposed legislation that allows the state to take $301 million in county Proposition 1A funds.

Knabe, who chairs the board, said state legislators inserted the “poison pill” provision so that they will not be on record as taking county funds outright.

“It’s their cover so they don’t have to deal with the issue,” Knabe said. Under the budget agreement state leaders reached Monday, Los Angeles County stands to lose $109 million in gas taxes and $313.4 million in redevelopment project funds next year. If redevelopment projects were extended 30 years, as some have proposed, the county could lose more than $8.2 billion.

The state budget proposal would also cut millions in county health and social service funding, including $53.3 million from CalWorks, the welfare program for families, $22.1 million in substance abuse crime prevention, $21 million for mental health managed care and $5.7 million in AIDS/HIV treatment and prevention, county leaders have said.

“For the State to balance its budget on the backs of the state residents most in need of help, and the counties that serve them, is fiscally reckless and morally bankrupt,” the supervisors wrote in their proposal, set to be introduced at their weekly meeting this morning. “State spending and significant tax giveaways, among other things, have brought us to this precipice.

Transferring local funds into the State treasury does nothing to address these policy failures. Taking advantage of counties that serve the elderly, ill, mentally ill, disabled and the impoverished is wrong on its face, and it is illegal,” they wrote.

The county chief executive's staff has been researching the legality of the proposals, which could hurt county fire district funding.

 “We’re told that it’s likely not legal,” said Ryan Alsop, assistant to the county’s chief executive. “There are very specific criteria on making decisions on extending redevelopment outlined in statutes.” It has been difficult for even high-ranking county officials to get details of the state budget plan.

 “The information has been essentially embargoed,” said the county’s chief executive, William T. Fujioka. “We’ve been trying every possible resource we have to get that information.” Fujioka told supervisors he expects to learn more about the state budget plan’s impact on county funding by tonight.

-- Molly Hennessy-Fiske at the County Hall of Administration

Related stories:

Governor, legislative leaders begin building support for their budget pact

L.A. would lose $166 million under budget deal, city says

Full coverage: State budget crisis