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DOF Issues Executive Order to Repay Balance of Unfunded Mandates

Reimbursements Expected June 22

June 12, 2015
The Department of Finance (DOF) issued an executive order on May 27 to the State Controller’s Office (SCO) for the reimbursement of costs incurred in complying with state unfunded mandates prior to 2004.
 
The Controller’s office anticipates that payment for the principle owed will be made by June 22 and payment for the interest owed is expected by September 2015, after the Controller’s office recalculates and verifies amounts estimated by DOF. 

Under Prop. 1A (2004), sponsored by the League of California Cities® and other local government organizations, the state has until FY 2020-21 to repay mandate reimbursements owed to cities, counties and special districts prior to 2004. The 2014 State Budget Act included $100 million repayment on the amounts owed. Those payments were made in August 2014. The 2014-15 state budget also provided for additional repayments if revenues in the Governor’s 2015 May Budget Revise exceed estimates. The May Revision determined that sufficient additional revenues were received to repay the entire remaining balance of reimbursements owed, approximately $765 million including interest.     
 
Of the $765 million, approximately 77 percent would be directed to counties, 22 percent ($168 million) to cities and 1 percent to special districts.
 
The executive order contains the amount to be paid to each agency.
 
The repayment of this debt is consistent with the Governor's focus on improving the state's fiscal condition to ensure it is better prepared for future economic downturns. The League also appreciates the repayment of these funds to local agencies where they can be used for local purposes.


 
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