L.A. County Chief Administrative Officer David Janssen was using the word "ironic" a lot in describing the new budget last week.

The irony, he pointed out, is that the proposed county budget would include hundreds of millions of dollars in additional spending to reopen jails, add sheriff's deputies and prosecutors and boost services to unincorporated areas despite a $437 million shortfall in the health department that looms in just 15 months.

The health department itself would be spending more dollars to hire 153 employees "to meet operational needs" a year before the boom is lowered in the form of a cutoff in federal funds.

"We must continue to provide the services to the public as needed," Janssen told reporters.

Janssen said the budget sets aside $40 million in general fund dollars to help the health department cope with anticipated future cuts. But he acknowledged that would be far from enough.

Janssen said the health department and county supervisors had previously moved to close hospitals and reduce other services to prepare for the federal funding cutoff, only to have those cuts reversed by court orders. That included a federal court order voiding the supervisors' earlier decision to close the Rancho Los Amigos National Rehabilitation Center in Downey.

The Department of Mental Health Services has a $25 million operational shortfall that will lead to cuts in next year's budget. Although Mental Health will get about $250 through proposition 63, which voters approved in November, those funds can't be used to replace current county money so the cuts will still have to be made, Janssen explained.

Janssen's staff also didn't factor an estimated $240 million in proposed federal Medicaid funding cuts and another $160 million in various state program funding cuts that could hit the county later this year. Those could wipe out nearly all the extra funds being planned to boost services.

"If those cuts do happen, we'll have to cut services this year," Janssen said. "But we don't know the exact amounts, so it's our policy not to include those cuts until we have specific figures," Janssen said.

Waiting Game
After weeks of gathering hundreds of thousands of signatures, proponents of all the initiatives vying for qualification on a statewide special election ballot are wondering whether there will be a special election after all.

Driving the uncertainty is a provision in the state constitution that makes a decision to pursue a statewide initiative irrevocable once signatures are submitted to county registrars. The generally agreed upon last day to submit signatures to qualify initiatives for a presumed Nov. 8 special election is May 6.

Before that date, initiative backers can choose not to submit signatures if they can strike a deal with Gov. Arnold Schwarzenegger and the Legislature.

For example, proponents of an initiative to cut the prices of prescription drugs and industry backers of a counter-initiative to bar unions from using dues for political purposes are now in discussions to try to reach a compromise.

The initiative to bar union dues could also figure in another fight between business and labor over a labor and education initiative to allow commercial properties to be taxed at market value instead of reduced rates under Proposition 13 a hit on business estimated at nearly $3 billion.

"All these initiative backers are running up against a very tight timetable and they are realizing that a special election could be risky as well as expensive," said Bob Stern, president of the Center for Governmental Studies.

Schwarzenegger has already pulled back support from an initiative to convert public pensions to 401(k) defined contribution plans. There's also been speculation that he may be willing to deal on his remaining three initiatives, including a redistricting overhaul, merit pay and tenure changes for teachers and stricter state spending limits.

At a recent appearance in Auburn, Schwarzenegger was ambivalent. He said the signatures could be used as a "bargaining chip" in negotiations.

Discussions on a redistricting compromise between Schwarzenegger and Senate president pro-tempore Don Perata, D-Oakland, have been taking place for weeks.

Schwarzenegger has until mid-June to decide whether to call a special election. If he decided against it, then any initiatives that qualify would appear on the next regularly scheduled ballot in June 2006.

High-Speed Rail on Slow Track
The $10 billion high-speed rail bond measure that's already been postponed once could be postponed again.

Assemblyman Alberto Torrico, D-Fremont, has a bill to postpone the bond to the Nov. 2008 ballot from the Nov. 2006 ballot.

The rail bond measure to build the Los Angeles-to-San Francisco backbone of a high-speed rail network was supposed to have been on the Nov. 2004 ballot. But that summer, as the state was borrowing nearly $15 billion in bonds to help close a budget deficit, backers believed voters would reject the high-speed rail bond, so they got Sen. Kevin Murray, D-West Hollywood, to author a bill to push the measure back to 2006, when they hoped the state's budget picture would be brighter.

Torrico is now using the same argument that voters are unlikely to pass the measure with the state still mired in multibillion dollar deficits. And he has the support of Murray, who sits on the Senate Transportation Committee.

Proponents of the bond measure say that the delay would only push up the cost to build the rail network should voters ultimately approve it.

*Staff reporter Howard Fine can be reached by phone at (323) 549-5225, ext. 227, or by e-mail at hfine@labusinessjournal.com .

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