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Administration "Pulls The Trigger" on $980 Million in Additional Cuts

December 14, 2011
On Tuesday, Gov. Jerry Brown and Department of Finance (DOF) Director Ana Matosantos held a press conference to discuss the state's economic forecast. According to DOF, revenues for FY 2011-12 are $2.2 billion below projections, activating some of the automatic "trigger cuts" included in the FY 2011-12 state budget. The Aug. 19 CA Cities Advocate story, "State 'Trigger Cuts' Loom as State Revenues Fail to Match Budget Projections" outlines many of $980 million in cuts which will become effective in January and February 2012.

While a number of these cuts will likely have indirect impacts to specific communities, such as those with a nearby university, those with the most direct impacts on cities are the cuts to libraries and the increase in county charges for youthful offender placements in Division of Juvenile Justice (DJJ) .

The $15.9 million reduction in state library funding essentially eliminates all remaining state funding for the California Library Services Act, the state literacy program, and the Public Library Foundation. These programs help fund services like local library transfer fees and funding for adult literacy programs. The cuts will not only eliminate all state funding for local library programs but also jeopardize federal funding for the Braille and Talking Book library programs. Earlier this year, the legislature cut $15.2 million of state library funding as part of the FY 2011-12 budget agreement.

Cities may also see indirect impacts resulting from the increased DJJ contract costs. Currently, counties contract with the state Department of Corrections and Rehabilitation to provide housing and programs for the small, and highly specialized, youthful offender population segment. Counties contract with the state because housing and programming can be too costly for the handful youthful offenders requiring supervision and services, compared to DJJ that can house and provide service more efficiently and effectively to a larger, consolidated population.

Counties will be faced with even more tough choices with the increased contract costs for how they manage youthful offenders and also their overall corrections realignment programs. With no additional resources, counties may have to reduce allocations to adult corrections and post-release supervision. In some counties, cuts could also be made to those program dollars allocated to police department-based services. In addition, this only intensifies concerns that city police department budgets will be further stressed, especially given there is no funding for city services to mitigate the impact of realignment.

Both tier I and II trigger cuts were activated, however the level of reductions ultimately made to K-12 schools was far less than the expected. K-12 school funding could have been cut by $1.5 billion but was only cut by $79.6 million. Tier II also included $248 in cuts to Home-to-school transportation and $72 million in cuts the California Community Colleges related to an apportionment decrease.

Gov. Brown's FY 2012-13 Budget

Although the Governor has until Jan. 10 to introduce the exact details of his FY 2012-13 budget, during the Tuesday press conference, he stated his budget will include a new round of trigger cuts that would go into effect should his ballot measure to raise taxes by $7 billion fail.

During questioning from press about the severity of the trigger cuts the Governor said "Washington is not exercising fiscal discipline, many of the cities aren't stepping up to the plate. I would like, under my watch, to have it said that California met the challenge, and we cut and we raised revenues and we created a balance." The Governor did not elaborate on his comment relative to cities.

The Legislature is scheduled to return to the Capitol on Jan. 4, 2012.

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