While the State of California's budget calls for austerity measures, state park closures and tax hike ballot measures, the Associated Press reports that approximately $2.3 billion of taxpayer funds are held in a variety of special funds. Officially reported fund balances and actual cash on hand do not always match.
Who has this money?
There are about 17 accounts, which have balances far higher than reported to finance department officials. Case in point is the low-cost child health insurance fund, which shows a $30 million discrepancy between actual cash on hand and reported funds available.
How many of these special funds are there?
The Mercury News estimates the number of special funds to surpass 500 accounts.
Aside from the lack of transparency, why is it a big deal that various agencies have more money than budgeted?
When Governor Jerry Brown and the California legislature drafted the budget, it relied on an $8.8 billion figure of available agency "rainy day" cash. As noted by the controller's office, the actual balance of available cash is closer to $11.1 billion. This difference could have affected controversial cuts, such as park closures or cuts to entitlement programs.
What do government officials say?
A Department of Finance spokesperson told the publication that this revelation "does not necessarily translate into hidden funds. In many cases, there will very likely be legitimate accounting reasons for the difference in those funds." When asked for his opinion, Gov. Brown stated, "When somebody comes and says, 'Hey, guess what, we have some money over here,' well, that's a lot better than saying, 'Whoops, we don't have any money'."
Whose responsibility is it to catch the discrepancies and sound an alarm?
As noted by the spokesperson for Controller John Chiang, this job belongs to the California Department of Finance.
What is the possible fallout from finding more than $2 billion in special account funds?
In the wake of the Department of Parks and Recreation scandal -- the Modesto Bee noted that an employee at the agency claims to have repeatedly told supervisors about the $54 million in "hidden assets" -- the director of the agency resigned. During the unraveling of this scandal, it became known that a department employee engaged in an unapproved vacation buy-back scheme, which cost taxpayers in excess of $271,000. This scandal has a further ripple effect: donors, who agreed to pay into a fund that would keep state parks slated for closure open, want their money back. The Mercury News reports that one nonprofit conservation group feels betrayed. "They sort of came to us under false pretenses. They cried wolf, and we responded," the spokesperson commented. The City of Whittier is demanding a refund of the $30,000 it donated to take Pio Pico State Park off the closure list. Sonoma County is withdrawing its consideration for a sales tax increase, which would have benefited local parks threatened with closure, the Sonoma Valley Sun reports.
Sylvia Cochran is a Los Angeles area resident with a firm finger on the pulse of California politics. Talk radio junkie, community volunteer and politically independent, she scrutinizes the good and the bad from both sides of the political aisle.
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