Stanislaus County could get more than $6 million a year from negative bailout fix

Stanislaus County expects to garner a $6.2 million annual benefit from correcting a decades-old tax inequity last year, which is much more than previously anticipated.

Over 35 years, the so-called negative bailout required the county to give up more than $70 million in tax revenue to the state, because of an unintended consequence of a law that assisted counties that lost revenue to Proposition 13 in 1978.

Before Gov. Jerry Brown signed the legislation in September to fix the problem, officials believed the county would stop losing $2 million to $3 million in tax revenue annually. But a midyear budget report to supervisors Tuesday estimated the county will receive $6.2 million from the legislative fix, and the number could be as high as $6.7 million, Assistant Executive Officer Jody Hayes said.

Hayes explained that the county originally thought it would have to split the benefit with the state, based on the complicated formulas for distributing revenues in California, but discussions between the county auditor-controller and state controller’s office determined it wasn’t so.

“We had thought the state would retain more of the funding, but according to the state controller, that was not correct,” Hayes said. “There is no question that it’s a significant resource for our organization and the community.”

The $6 million-plus will improve the county’s bottom line for the budget year that ends June 30. Top county officials can discuss what to do with the extra money in next year’s budget after seeing how much the county gets, Hayes said.

Tuesday’s budget report made recommendations to supervisors designed to produce operational savings and prepare for slower economic growth and the potential for a downturn after more than six years of recovery.

In one highlight, the Community Services Agency has saved about $1.2 million by reducing foster care cases this year. The decline in cases, which followed an upturn in recent years, was achieved by placing neglected or abused children with family relatives and providing supports to keep them from needing higher levels of care, staff members said.

The report also included an update on a public safety restoration program that is rebuilding staff in the district attorney’s office, probation, public defender and Sheriff’s Department. Of the 39 positions approved in the 2014-15 fiscal year for bolstering public safety, 21 positions are filled.

The county’s $1.1 billion budget this year included $1 million for technology innovations to improve customer service or provide more services online to residents. According to Tuesday’s report, 19 projects developed by county departments are recommended for funding, including self-serve checkout kiosks for smaller libraries and an opportunity for people to make required payments electronically to the Probation Department.

The Stanislaus Animal Services Agency, which includes the county, has three innovation projects that could be rolled out later this year. Executive Director Annette Patton said an interactive voice response system will allow customers to pay for pet license fees by phone.

A second service will be online account access for dog owners, telling them when their dog is due for a rabies shot or when their license expires. People can currently pay dog license fees online.

The other project will put tablets in the hands of animal service employees, so they can quickly find background information about an adoptive pet for a customer or find other information. The tablets will allow animal services officers in the field to access information from the agency’s computer files.

Patton said the joint powers board over the agency could approve the innovation projects March 17.

This story was originally published March 8, 2016 at 4:47 PM with the headline "Stanislaus County could get more than $6 million a year from negative bailout fix."