Government Finance and Operations 03/11/2011
State Oversight of Local Finances
SB 186 (Kehoe) – Concerns
As Amended on March 10, 2011
SB 186, by Senator Christine Kehoe, would give the State Controller broad authority to audit and investigate local agencies’ compliance with state financial laws, grant agreements, and local ordinances.
Because of the close relationship between counties and the state, both levels of government have a stake in the other’s fiscal wellbeing. In the wake of last year’s municipal scandals, the Controller reports having received tips of inappropriate situations in other local agencies. However, current law leaves him powerless to investigate. But counties are concerned that the discretion SB 186 would grant the State Controller is too great and the source of funding for the allowable activities improper.
The idea of a state official having the authority to perform audits, at his or her discretion, of local agencies is troubling on its face. SB 186, as introduced, gave the Controller complete discretion; the March 10 amendments, publically available today, require a “reason to believe” the local agency is not complying with state financial laws, grant agreements, or local ordinances. CSAC will examine the effect of this amendment in the coming days.
Furthermore, the source of funding the Controller’s actions as contemplated in SB 186 is improper. If the Controller chooses the circumstances for these audits, and their number and extent, but can force the affected local agencies to pay for them, then there is no incentive to make the program or its administration efficient and effective. Moreover, the way the bill reads now it clearly would impose a reimbursable, state-mandated cost to local agencies, which the bill does not acknowledge.
The Senate Governance and Finance Committee will consider SB 186 at its hearing on Wednesday, March 16.
AB 80 (Fong) – Support
As Amended on March 3, 2011
AB 80, by Assembly Member Paul Fong, would move the presidential primary from February to June, and in doing so reconsolidate it with the statewide direct primary.
In the wake of the last presidential primary season, in which many states — including California — moved up their elections to influence the nation’s candidate selection, the major national parties imposed rules about just how early they could be. Under those rules, California must either move its election later in the year or risk the parties excluding its decision entirely.
Reconsolidating the presidential primary and the statewide direct primary increases voter participation and decreases costs. Holding the primary election in June instead of earlier in the year ensures that state and local redistricting processes can run as planned, and it gives candidates time to determine the seats for which they are eligible.
The Assembly Elections and Redistricting Committee will consider AB 80 at its meeting on Tuesday, March 15.
AB 33 (Jeffries) – Support
As Amended on March 8, 2011
AB 33, by Assembly Member Kevin Jeffries, would give the Governor 90 days to appoint someone to a vacancy on a county board of supervisors. If the Governor fails to do so, the bill would allow the board either to fill the vacancy by appointment, call a special election to do so, or vote to leave the seat vacant until the next regular election. Under current law, the Governor has the authority to fill supervisorial vacancies and no deadline for doing so. AB 33 is similar to last Assembly Member Jeffries AB 1671 from last year, which CSAC supported, but which Governor Schwarzenegger vetoed.
The Assembly Local Government Committee will consider AB 33 at its hearing on Wednesday, March 23.
SBs 191, 192, and 193 (Senate Governance and Finance Committee) –
As Introduced on February 8, 2011
SBs 191, 192, and 193, introduced by the Senate Governance and Finance Committee, would retroactively cure the minor errors and omissions that public officials make throughout the year. In turn, this will give investors confidence in public agencies’ securities and therefore lead to lower interest rates for state and local bonds. They do not correct fraud, corruption, or unconstitutional acts. These “validating acts” traditionally receive “aye” votes from all legislators, since with their passage everyone wins.
The Senate Governance and Finance Committee will consider these three bills at its hearing on Wednesday, March 16.