President Barack Obama triumphed and Proposition 30 passed, but the looming federal "fiscal cliff" and California's ongoing budget woes spell a rough next few years financially for local governments.
A perfect storm of potential federal trigger cuts and state budget deficits could lead to drastic reductions in funding for local public safety, social services, health care and transportation.
The "fiscal cliff" refers to the combination of tax increases caused by expiring Bush-era tax cuts and spending cuts dictated by the Budget Control Act of 2011. The tax cuts, including payroll taxes and unemployment insurance, are scheduled to expire at the end of 2012.
If Congress allows the tax cuts to expire, more revenue would be available for government programs. Some argue, however, that increasing taxes would slow the economic recovery.
A series of trigger cuts, called "sequestration," are simultaneously set to go into effect starting Jan. 2. The trigger cuts arise from the failure of a congressional supercommittee to deliver a compromise deficit-reduction plan after last summer's debt ceiling negotiations. The deficit totaled about $1.1 trillion in fiscal year 2012, according to the Congressional Budget Office.
Federal trigger cuts would lead to automatic, across-the-board funding reductions equally affecting defense and nondefense discretionary programs. By law, Congress would be required to find savings in the order of
With little changed in Congress following Tuesday's election, the parties are still hotly debating solutions to the fiscal cliff crisis. Democrats want to save social programs and allow tax cuts for the wealthy to expire. Republicans are fighting to prevent defense cuts and believe tax increases to the wealthy would harm economic growth.
More political gridlock would be devastating for the economy, as well as for people who rely upon government agencies for support in times of need. The superstorm caused by sequestration would impact all residents, regardless of income level.
For example, FEMA disaster relief would suffer a $580 million cutback nationwide, leading to smaller reserves for recovery efforts in the event of a terrorist attack or natural disaster like Hurricane Sandy.
Other program reductions are planned in the areas of transportation, education, criminal justice, health and human services, economic development, housing, environmental protection, and more.
Alameda County could potentially see declining federal funding in the following program areas: Older American/Aging Services, Substance Abuse and Mental Health, Temporary Assistance for Needy Families, Supplemental Nutrition Assistance Program, the Housing and Urban Development Community Development Block Grant and HUD Homeless Assistance.
California narrowly averted a second storm beginning in 2013 with the success of Proposition 30, the governor's tax measure for education and public safety.
In addition to raising essential funds for K-12 and community college education, Proposition 30 amends the California Constitution to guarantee funding for local public safety programs for the next five years. The responsibility for these programs was passed down to the county level in 2011 as part of Gov. Jerry Brown's "realignment" plan.
Even though Proposition 30 passed, under the 2012-13 spending plan, the general fund and the Education Protection Account will have a combined 2011-12 year-end deficit of about $3.6 billion, according to the Legislative Analyst's Office.
In this climate of possible federal and state rollbacks, local elected officials are working with their hands tied behind their backs as they fight to maintain essential operations while being forced to make painful program reductions.
To prepare for the coming tsunami of cuts, local government must leverage public and private funding sources and, unfortunately, ask our service providers to do more with less.
Americans have shown they agree with Obama's policies. Now Congress must acknowledge the voters' vision and work cooperatively with the president to achieve a reasonable compromise to reduce the deficit without decimating critical infrastructure and safety net services that all residents depend on.
Alameda County Supervisor Keith Carson serves on the executive board of the California State Association of Counties.