Ken Carlson

Negative bailout solution for Stanislaus County has new life

A better state funding formula for Stanislaus County has a pulse again now that it’s being folded into a different budget trailer bill in Sacramento.

Sen. Cathleen Galgiani, D-Stockton, is putting what’s known as the “negative bailout” solution into a local government bill that addresses tax inequities for various cities and counties in California.

The negative bailout has been part of a redevelopment dissolution bill opposed by large cities and their friends in the Legislature. Local officials were betting that bill would never come up for a vote or would go down as another failed attempt at fixing the negative bailout.

Working with local officials, state representatives from the Valley have come close to righting a wrong for Stanislaus County in the 2015-16 state budget. A state action to shore up cities and counties that lost property-tax revenue to Proposition 13 in 1978 somehow penalized Stanislaus and five other counties.

Because of the way the formula was written, Stanislaus has sacrificed up to $3.4 million in additional revenue every year since then.

Galgiani said the local government Senate bill was being drafted Thursday.

“This is something we have been negotiating for some time, trying to get the votes for it and addressing concerns that have been raised,” Galgiani said. The new bill that would correct the funding formula for Stanislaus County could come up for a vote Friday or next week.

“We hope to get it passed and sent to the Assembly,” Galgiani said. “Stanislaus County has been hurt for 35 years by this antiquated formula and it’s time we bring some equity to the equation.”

With the state flush with revenue, there’s more hope of settling some long-standing issues between the state and local government agencies.

Galgiani said she’s working with other Democrats who have tax inequity issues in their districts, such as “no tax” cities in the Bay Area and Southern California agencies piqued about vehicle license fees. (I won’t try to explain a “no tax” city, except to say they too were skewered by Senate Bill 154 in the late 1970s.)

Beside bringing more balance to tax apportionment, the senate could also address some redevelopment issues important to cities, Galgiani said.

If the solution for negative bailout is approved in the final budget that’s signed by Gov. Jerry Brown, the benefit for Stanislaus County would be around $2 million a year. That money could be spent on public safety or other services at the discretion of the Board of Supervisors.

The county would not be refunded for the $70 million it has lost to the negative bailout over 35 years.

Ken Carlson: (209) 578-2321