1. Governor’s 2010-11 May Revision The Not-so-Good, the Bad, and the Ugly

2. Overview • Combined $19.1 billion gap for 2010-11 • $7.7 billion in 2009-10 • $10.2 billion in 2010-11 • Includes $1.2 billion reserve • Continued reliance on federal funds • Majority of “solutions:” $12.4 billion in spending reductions • Outright program eliminations will have significant impact on counties and citizens we serve

3. Proposed Budget Solutions(dollars in millions)

4. Governor: No budget signed without inclusion of budget and pension reforms Republicans: No-tax-increase budget is good starting point Democrats: Governor’s proposal to choose tax breaks over the children and elderly unacceptable; realignment of program responsibility and revenue authority is the answer Notable Responses

5. Health and Human Services • Outright elimination of CalWORKs, beginning 10/1/2010 • Redirection of $602 million in Realignment funding for local mental health programs to social services; significant new sharing ratios for Child Welfare & Food Stamps Administration • Redirection of nearly $1 billion in “county savings” • Suspension of AB 3632 mandate • Medi-Cal savings focused on cost sharing

6. Corrections/Public Safety • Counties to detain state prison inmates sentenced to felony terms of 36 months or less • Counties would receive $11,500/inmate to cover probation programming, services, and alternative custody options • Transfer of responsibility to counties for supervision of juvenile parolees (those exiting a state DJJ facility) • Continuous appropriation of $502.9 million for local public safety subventions (now funded through VLF) beginning in 2011-12 • Commitment of $300 million additional in lease-revenue bond authority for local juvenile detention facility construction • Increased fee to fund court security

7. Transportation • No further cuts to transportation following March transportation tax swap • Borrowing of $650 million in HUTA to be repaid in June 2013 • One-time loan • Reflects redirection of funds unallocated in March fund swap • No impact on transportation programs

8. Government Finance and Operations • Continued commitment to provide $68.2 million in reimbursement for county costs associated with May 2009 Special Election • No change from 2009-10 budget and January 2010-11 budget proposal to suspend almost all mandates

9. Agriculture and Natural Resources • No funding for Williamson Act • Restoration of $140 million to state parks, replacing funding previously committed through now-withdrawn Tranquillon Ridge (oil drilling) • Continued advancement of Emergency Response Initiative: 4.8 percent surcharge on all residential and commercial property insurance statewide to fund CALFIRE; assumes 7/1/10 implementation

10. Response and Next Steps • Governor’s opening salvo sets stage for potentially long summer • Legislature will begin budget subcommittee hearings this week Next Steps: • CSAC focusing efforts on framing discussion on realignment and ensuring county voice is heard • Will roll out communications and advocacy strategies in coming days and weeks • Here to support local efforts to educate public and lawmakers about budget impacts