The LAO recommendation was rebuffed last year due to faulty mathematical calculations, an ever-changing universe of multi-county special districts and the bipartisan desire to maintain strong regional special district units of local government.

The inclusion of this $45 million transfer in the Assembly Republicans' plan is a surprise because several legislators within the caucus have authored legislation to repeal, cap and roll-back the ERAF transfers that have devastated local government for a decade. This $45 million proposal moves in the exact opposite direction. Special districts help keep property tax and services like surface and groundwater supply and delivery, water quality, flood control and water security where they belong - at the local level.

The Assembly Republican plan would be in addition to the approximately $426 million that will already be taken in FY 2003-04 from special districts under ERAF. It would also be added to the thousands of dollars that water districts will be forced to pay in higher waste discharge permit fees from the passage of AB 10X, along with LAO proposed increases of water rights application fees, dam safety fee increases and new water rights compliance fees.

The multi-county special district ERAF exemption was not previously targeted in the Governor's January budget proposal, the LAO budget analysis, or the Assembly Democrats' "April Package" proposal that was released last week.

The next 2003-04 State Budget milestone is the release of the Governor's May Revise of his January Budget plan. The "May Revise" is due to be released in mid-May. Please be alert to any calls to grassroots outreach action in the coming weeks from ACWA on the budget issue.

For any district-specific budget questions, please contact State Legislative Advocate Wendy Ridderbusch at 916.441.4545.