California lawmaker advocates pushing costs to counties

SAN FRANCISCO (Reuters) - California could lower its costs and help narrow a budget gap of more than $19 billion by giving counties more responsibility for safety and social services, the state Senate's president said on Monday.

"Through a multi-year restructuring of government, we can save billions of general fund dollars by moving programs off our books while still giving counties secure and adequate funding to maintain the core services that protect communities and the most vulnerable in society," President pro Tem Darrell Steinberg said.

While Steinberg's plan would push more of the cost of public services onto county governments, it would provide them with new revenue and the ability to raise new revenue to pay for them.

The proposal rivals the budget plan of Governor Arnold Schwarzenegger, a Republican, who has proposed balancing the state's books largely with deep spending cuts. Democrats who control the legislature oppose that approach and aim to minimize cuts.

Under Steinberg's plan, funds for the transfer of programs to counties would come from an oil severance tax, vehicle license fees, federal health care aid, a portion of state revenue from the sales tax and from a delay of corporate tax breaks.

Schwarzenegger's opposition to new taxes to balance the budget is backed by Republicans in the legislature's minority, who have enough votes to block Democrats from trying to pass budget plans on their own.

Assembly Speaker John Perez said he was looking forward to working with the Senate on its budget plan despite differences to his proposed plan.

Last month Perez unveiled a plan he said would tackle the state's general fund shortfall by borrowing against the recycling and disability insurance funds, imposing an oil severance tax and delaying tax breaks.

California Attorney General Jerry Brown's office last week cast doubt on the part of Perez's plan that involves borrowing. A spokesman for State Treasurer Bill Lockyer said on Monday that it would need Brown's blessing to sell the debt proposed in the speaker's plan.

Assembly Republican Leader Martin Garrick said Steinberg's plan is "just another ploy to continue to raise taxes on hard-working Californians and grow the size of government."

California lawmakers have already missed their deadline for approving a budget agreement and are only days away from the July 1 beginning of the state's new fiscal year.

California lawmakers are notorious for lengthy budget battles and analysts say they will once again fail to advance a budget plan that Schwarzenegger would sign by the start of the new fiscal year.

(Editing by Leslie Adler)