Gov. Brown signs bill that ends ‘negative bailout’ nightmare for Stanislaus County

Gov. Jerry Brown signed legislation Tuesday that eliminates a tax revenue inequity that has plagued Stanislaus County for about 35 years.

The governor’s office announced that Brown signed Senate Bill 107 and a second bill related to redevelopment before leaving for Seattle to discuss climate issues with other governors and Chinese officials.

The Senate bill contains an item that ends the “negative bailout,” which has required Stanislaus to give up $72 million in revenue since about 1980.

“This is fantastic,” County Supervisor Vito Chiesa said. “We figured he was going to sign it. Stanislaus County is not going to get short-changed on this key issue.”

The county has sacrificed up to $3.4 million in annual revenue since legislation was passed to bail out counties that lost revenue to Proposition 13 in 1978. Rather than getting relief, Stanislaus and five other counties had to give up more revenue because of the state’s formula for allocating the bailout money to counties.

According to records maintained by Auditor-Controller Lauren Klein, Stanislaus was shorted on the bailout in 1979 and received nothing in 1980 before the state Department of Finance ruled the county owed $5.1 million retroactively and required the county to sacrifice $1.4 million in 1983. The losses grew from there.

Despite a dozen bills introduced on the county’s behalf over three decades, the county wasn’t able to correct the inequity, though a 2009 bill sponsored by then-state Sens. Dave Cogdill and Jeff Denham limited the county’s losses.

State representatives from the Northern San Joaquin Valley and county officials pushed to garner enough votes for Senate Bill 107 on the last day of the legislative session this month.

Chiesa said the county will have more than $2 million in additional revenue with the budget year that starts July 1, 2016. And it won’t have to sacrifice revenue in the future. He expects county officials will start talking about a possible use for the extra money early next year.

This story was originally published September 22, 2015 at 3:32 PM with the headline "Gov. Brown signs bill that ends ‘negative bailout’ nightmare for Stanislaus County."