Special district cash a budget solution
Once again, a logical solution to California's $25 billion budget deficit stares the state in the face.
There is enough cash lining the pockets of special districts that are generally unwilling to share their wealth to balance the budget. And that doesn't include the redevelopment funds Gov. Brown proposes to tap.
What are these special districts? We're talking about water districts, irrigation districts, publicly-owned bus companies, sewer districts, sanitation districts, hospital districts and more. In large part, these agencies get their money from fees, not taxes.
In many places, if you want your garbage collected, you pay the sanitation district.
If you want water to come out of your tap, you pay the water district.
After paying all expenses, the 250 wealthiest special districts in California had cash holdings of $41.3 billion entering last year.
The money was gathered over decades of operation and sitting is in bank deposits or other investments. The Orange County sanitation district, for one, had "retained earnings" of $1.35 billion. The same county's water district had $1.2 billion in reserve.
If any city or county possessed that kind of uncommitted cash, taxpayers would be up in arms, demanding lowered fees and distribution of the wealth.
When cities have a bit of extra cash, many of themn donate some of it to local schools.
But special districts would rather sit on the cash, pleading future infrastructure needs.
Water districts justifiably say they never know when they'll need to repair a burst line. Money must also be available for sewer repairs and new buses.
According to the Orange County Register, about half of special district money is reserved for specific projects or future debt payments.
That still leaves about $20 billion unspoken for. No one knows how much might eventually be needed for repairs to buildings and equipment, but they won't be spending $20 billion on those items anytime soon. Let's estimate they might eventually need $5 billion for repairs, above and beyond planned budgets.
That leaves $15 billion they could hand over to the state - enough to solve the budget problem now that legislators have passed $14 billion worth of spending cuts.
But the state can't dun the districts as it did city redevelopment agencies, it can't eliminate the districts and it can't demand some of the districts' reserves since passage last year of Proposition 22, which keeps most local tax revenues in local government hands.
But if they were truly playing hardball, Brown and the Legislature could threaten to withhold other money from areas where special districts don't offer some of their reserves to help the state. Brown could also threaten to withhold federal grant money that is allocated by the state.
The governor has plenty of jawboning power.
If local voters saw government services such as police and fire protectionand schools suffer while special districts refuse to contribute, it's possible they might rise up and vote out some district board members.