How elected leaders linked arms
and saved Stanislaus County $100 million

Reprinted from the Turlock Journal

By Mike Lynch
Special to the Turlock Journal

When Prop 13 passed in 1978 the state of California suddenly had a major problem.  How would local government and schools meet their revenue needs? 

Fortunately, the state had a gigantic budget surplus at that time. The state put together a plan to use those funds to bail out cities and counties. 

In crafting that bailout, the state devised a formula that satisfied most local government, but inadvertently penalized six counties that had been prudent in their taxation and spending policies.

One of those counties was Stanislaus. 

The state’s plan was called the “negative bailout,” and it required that those six well-managed counties received less funds from the state than they received under the formula in place before Prop 13 was approved. 

Under the new state funding formula, Stanislaus County lost millions of dollars every single year from 1979 until 2015.

This was in place for 36 years. Through those years, local legislators had tried to find a fix. Gary Condit, Sal Cannella, Dick Monteith, Bill Berryhill all had worked on various solutions. Legislation actually passed one or both houses only to be opposed by the Department of Finance or to be vetoed by governors.

But in 2015, Stanislaus County was primarily represented by Senators Anthony Cannella (Sal’s son) and Cathleen Galgiani by Assemblymembers Adam Gray and Kristin Olsen – two Republicans and two Democrats. More important that their party affiliations, though, was that they all had records of putting their issues and their districts ahead of partisan politics. All had been criticized for not being Democratic or Republican enough.

Another major player was Stanislaus County Supervisor Vito Chiesa, who had become an influential figure in the capitol because of his role in the state association that represented county governments.

At that moment, in 2015, Chiesa and the four legislators saw an opportunity. Why not add a provision in a bill to fix the negative bailout?

Chiesa had been working toward such a solution for months, and was in position to lighten potential opposition from other jurisdictions around the state. He approach Gray, Olsen and Anthony Cannella and Galgiani and all four said: “Let’s go!”

Easy win, right? Nope.

Partisan politics often gets in the way of good government. The 2016 elections were not far off.  Both the Democratic and Republican political staffs were anxious about the negative bailout provision. Olsen was a rumored candidate against Galgiani. Gray was always in trouble with the activists of both parties. Democratic political staffers weren’t going to let a bill that enhanced Olsen’s local standing easily pass the floor. Likewise, GOP staffers didn’t want Galgiani or Gray to get any credit for good district work. After all, both were in swing districts.

Some provisions of the bill had engendered opposition around the state. Two valley mayors got involved. One, from Fresno, told a state senator who represented a portion of Stanislaus that there would be serious repercussions for him if he supported the bill, and he didn’t.

More importantly Garrad Marsh, the mayor of Modesto, didn’t like other parts of the bill that penalized Modesto. Still, he told Assemblyman Gray “this change is long overdue” and eventually supported it. 

Other local government opposition was minimal. Chiesa had done his part.

The suggestions – some might call them threats -- of a political price to be paid were ignored by Olsen, Gray, Galgiani and Cannella. These four legislators had proven to be spectacularly effective for their districts, and political paranoia wasn’t about to divert them from fixing the negative bailout problem. None of the four would put loyalty to their party above loyalty to the people they represented.

With some help from others applying pressure at key moments, the law was passed and signed by Gov. Jerry Brown.

As of the end of the current fiscal year, Stanislaus County will have received over $100 million that it would not have gotten before this bill became law. These funds are available for all county functions — law enforcement, health, roads, etc. — with no restrictions.

The point? Working together matters. Partisanship is less important than problem solving. Elect folks who put district loyalty above partisan loyalty.

And if you happen to see former state legislators Olsen, Gray, Cannella, Galgiani or Supervisor Chiesa around town, take a moment and tell them, “Great job on the $100 million negative bailout fix.” It’s a gift that keeps on giving.