Inter-Departmental Correspondence

County Manager’s Office


March 25, 2009


March 31, 2009







Honorable Board of Supervisors


David S. Boesch, County Manager


County Manager’s Report #4


Detailed Analysis of the 2009-10 State Budget



None. Informational only.



Commitment: Responsive, effective and collaborative government.

Goal(s): 20—Government decisions are based on careful consideration of future impact, rather than temporary relief or immediate gain.



On March 17, 2009, staff provided your Board with a preliminary analysis of the impacts of the recently adopted 2009-10 State Budget. The state budget agreement includes “trigger” cuts, deferrals and a slate of budget measures that must go before the voters at the May 19 Special Election. Departments have completed a more thorough analysis of how these scenarios impact County programs and services. We are also mindful that a June 8 downward revision of revenue estimates may well result in additional reductions. The updated estimated impact to the County is now $ 46 million.



On February 20, 2009 Governor Schwarzenegger signed a 17-month budget package. The complex budget package includes: $41.6 billion in “solutions:” $14.9 billion in reductions; $12.5 billion in tax increases; $5.4 billion in borrowing; and $1.3 billion in vetoes. The spending plan anticipates between $8 and $10 billion in federal stimulus funds.


State Budget Solutions

The revenue increases include:

    Sales Tax by 1 cent until July 1, 2011. If the spending cap does not pass, the increase would be in place for another year;

    Vehicle License Fee (VLF) from 0.65 percent to 1.15 percent through 2013-14 (2011-12 if spending cap fails). A portion of these funds would be used to fund local law enforcement programs.

    Personal Income Tax with a surcharge of 0.25 percent. If the state receives at least $10 billion in federal stimulus funds, the increase drops to 0.125 percent.


Additional “trigger” reductions are avoided if the federal stimulus funds California receives reach $10 billion. That determination will be made by April 1, 2009 at a hearing conducted by the Treasurer and the Director of the Department of Finance. These reductions would be effective on July 1, and include: elimination of the Medi-Cal optional benefits; a 10 percent reduction to public hospital reimbursement rates; 4 percent reduction to CalWORKS grants; and 2.3 percent reduction of SSI/SSP grants; and additional borrowing of $600 million.



Impact on San Mateo County


Health System— $5.3 million FY 2009-10

    Maternal, Child & Adolescent Health (MCAH)--$36,376

    CCS Medical Therapy Unit (MTU)--$14,395

    Mental Health Managed Care/ESDT/Mental Health Services Act (Prop. 63)--$2,528,000

    Mental Health Pharmacy & Lab General Fund--$2,493,000

    SMMC Acute Medical Services--$271,000

Additional “Trigger” Cuts— ($3.871 million)

    Ten percent reduction in public hospital reimbursement rates--$371,000

    Elimination of certain optional benefits in Medi-Cal (e.g., adult dental, optometry, acupuncture, chiropractic, podiatric, and psychology services)--$1.5 million

    Reduction in state payments for IHSS workers from $11.50 per hour to $9.50 per hour--$3.5 million

Special Election— $3.186 million)

    Children’s Health Initiative--$686,109, if Proposition 1D is approved by the voters.

    Prenatal to Three/Black Infant Health (BIH)--$1 million, if Proposition 1D is approved and the local First 5 Commission decides not to use its reserves to bridge this funding gap.

    Proposition 1E (mental health) modification--$2.5 million, if the proposition passes. Funds currently received from the Mental Health Services Act would be used to back fill funding for Mental Health Managed Care/EPSDT (Early and Periodic Screening, Treatment, and Diagnosis). If the proposition fails, the State will likely implement a similar-sized reduction to the funding for Mental Health Managed Care/EPSDT for children’s mental health services.

Two-Month Deferral of State Payments (from July and August to September 2009):

    Behavioral Health program payment deferral — ($6.4 million)


Human Services Agency— $1.3 million in FY 2009-10

    CalWORKS loss of COLA--$475,152 loss as a result of a 2.4 percent reduction in client COLA. The reduction would affect 2,400 clients.

    SSI/SSP--$10,848 loss as a result of a 5.8 percent reduction in the COLA for clients. The reduction will affect 270 Cash Assistance Program for Immigrants (CAPI) clients.

    Medi-Cal Cost of Doing Business--$700,000

    CAPI – SSI/SSP (No federal SSI COLA pass-through)--$119,880 in direct clients impact as a result of 2.3 percent reduction in CAPI cash assistance. The reduction will affect 270 CAPI clients.

Additional “Trigger” Cuts — ($758,683)

    CalWORKS (4 percent grant reduction)--$642,383 in direct payments to clients. Approximately, 2,400 clients would be subject to a 4 percent reduction in their monthly payments.

    CAPI SSI/SSP (2.3 percent grant reduction)--$51,600 in direct payments to clients. The reduction will impact 270 CAPI recipients.

    SSI/SSP--$65,000 in direct payments to clients. About 270 CAPI clients would be subject to a 2.3 percent reduction in their current payments.

Two-Month Deferral of State Payments (from July and August to September 2009):

    $10 million in each of two months ($20 million)


Probation Department— $1.5 million in FY 2009-10

    JJCPA --$441,441

    JPCF (Camps/Ranches) --$828,443

    Community Based Organizations (provider contracts)--$209,819


Public Works— $3.8 million deferral in FY 2009-10

Three-Month Deferral of Payments:

    Road Maintenance (Gas Tax)--$2,700,000

    Engineering (Proposition 1B Transportation Bond)--$1,100,000


District Attorney—$105,968 in FY 2009-10

    Statutory Rape Prosecution--$13,228

    Citizens Option for Public Safety (COPS)--$868

    Spousal Abuser Program—$91,872


First 5 San Mateo County—$3.6 million in FY 2009-10

Special Election:

    Potential Local Impact—approximately $3.6 million per year or $18 million over five years beginning September 2010, if Proposition 1D (First 5) modification is approved by the voters.

Additionally, for your information:

San Mateo County Regional Centers—$5.3 million in FY 2009-10)

    Loss of revenue for agencies providing services for the disabled in San Mateo County funded by the Golden Gate Regional Center --$5,314,394



The state spending agreement results in an estimated $15.6 million impact on the County’s FY 2009-10 budget. An additional $4.656 million reduction would result from the “trigger” cuts: a total of $30.3 million in deferrals; and the County’s First Five Commission would sustain a total loss of $18 million over a five-year period if approved at the May special election.