Outside Law Firm Hired by OC to Reclaim $48 Million Taken by the State
At the conclusion of the legislative session, the issue of lost VLF money was not taken up by lawmakers, so Orange County’s fight for $48 million continues. The state grabbed the VLF revenues from local governments under SB 89 and Orange County officials warn that without such funds, as many as 250 county employees could lose their jobs. In addition, cuts to critical public health programs including community clinics and social services may be necessary. Consequently, Orange County has now reportedly hired the law firm Best, Best & Krieger to pursue whatever legal options the local government may have to reclaim the $48 million. Supervisor Shawn Nelson commented that “We want to find a way to get all or at least some of the money back. But no one is itching to pick a fight with the state Legislature just to pick a fight.” The OC Register provides background on the county’s budget dilemma:
“County supervisors in June approved a $35 million increase in spending as part of the $5.6 billion 2011-2012 budget. The 2.7 percent spending boost came at a time when many other counties were making drastic cuts and laying off employees to survive rough economic times. Hours later, Orange County lawmakers got word that the state budget proposal was targeting $48 million that Orange County receives from California vehicle license fees as part of a guarantee while the county pays off its bankruptcy debt. What was a balanced budget suddenly threatened to be $48 million in the hole. To put it in perspective, the county would have to make a 5.48 percent cut across the programs it pays for to make up the $48 million.”
On September 20th, the Board of Supervisors will hear from the firm about its options. Vice Chairman John Moorlach had strong words about the loss in VLF revenue, stating that “It’s a dysfunctional relationship where we are a subdivision of the state and the state decides when and if it wants to pay us for the services rendered. Now do we not only have nonpayment but we have theft.”
And on a related note, Supervisors out in Riverside County have commented that the cities of Menifee, Wildomar, Eastvale and Jurupa Valley will need help because the loss in VLF revenues means the state’s newest cities will struggle to find their footing. Supervisor Marion Ashley recently stated that “We're all in this together and have to work this out together. These cities are losing a tremendous amount of funds. Will they be able to survive, or will they disincorporate and come back to the county? We're going to have to engage in discussions with each city and evaluate their status.” Collectively these cities will lose $14 million. For more, see here.