January 1995

Legislative Analyst's Office

Counties Provide State and Municipal Services

California's 58 counties play a dual role in providing services to their residents. First, counties are charged with the responsibility to administer a variety of state- required programs. Second, the counties administer a variety of local programs. These include some programs of state interest, such as public health and social services, as well as municipal services provided to residents of unincorporated areas of the county. In some cases, counties also provide municipal services to residents of incorporated areas, by agreement or contract with the city. The state- required and local responsibilities of counties are summarized below.

Great Variation in Portion of Population Living in Unincorporated Areas

In counties where much of the population lives in incorporated areas, residents receive most of the local services from cities. In other counties, the county government is more involved in the provision of municipal-type services to residents, although these counties may depend on special districts to provide some of these services.

As shown below, 12 counties have more than 80 percent of their population living in cities. These counties generally tend to be the most populous counties in the state, but some smaller counties also are highly incorporated, due to the adoption of growth management policies. In contrast, three counties--Alpine, Mariposa, and Trinity--have no cities. Consequently, all municipal services in these counties are provided by the county, or by special districts.

County Budgets Are Largely Driven By State Policy Choices

County revenues are derived primarily from state-controlled sources, including program-specific state aid, the property tax, and sales tax. In fact, state aid alone accounts for over one-third of county resources. Generally, counties have little control over how this money is spent.

County expenditures are largely dictated by state laws and budget actions with more than half of county revenues being spent for health and public assistance programs, and about one-quarter for public safety functions. Most of this latter spending reflects the costs of courts and jails.

The State Exercises Extensive Control In Most County- Administered Programs

As shown below, the state exercises significant program policy control in most county program areas. This is true whether the bulk of program funding comes from the state or from other (county or federal) sources. For example, although general assistance is funded entirely from county funds, the state determines the program policies that the county must administer. This relationship between state policy control and county funding requirements exists to an equal or lesser extent in most of the big county-administered programs.

Table Not Available

Counties Vary Greatly in the Revenues Available for General Purposes

Counties pay for their share of state-required program costs and for local programs out of the revenue they have available for general county purposes. County general purpose revenue (GPR) comes from a variety of sources, including the property tax, state general purpose subventions, and the sales tax. Due to the constraints imposed by Proposition 13, counties have very limited power to increase GPR.

The amount of GPR available to cover state-required program costs and local services in counties varies significantly. In fact, we estimate that in 1992-93 GPR ranged from less than $200 per capita in San Bernardino County to about $2,460 per capita in Alpine County. The statewide average GPR per capita in 1992-93 was roughly $279, excluding San Francisco (which as a city and county is not comparable to other counties), with over 80 percent of counties having per capita GPR of $200 - $500. The figure below illustrates this wide disparity in county GPR.


Cities Differ Greatly In Level of Services Pro vided

Californians overwhelmingly choose to live in cities: 80 percent of the state's population lives in incorporated areas. California's 466 cities were created voluntarily by local citizens to provide for local services and to give citizens local control of develop ment and other land use decisions. Many cities provide a wide array of municipal services--including fire protection, sewers, libraries, parks, and recreation, while others provide limited services to residents. Full service cities may provide services directly, or may pay other entities (such as the county, a special district, or a joint powers authority) to provide some of the services.

Other cities directly provide more limited services, either because their residents already receive these services from the county (for example, contract cities) or from special districts (for example, fire protection), or because of limits on local revenues.

City Budgets Reflect Local Preferences

City revenues are generated from a variety of taxes and user charges, with only a small amount of state or federal assistance. Fees-for-service and other user charges (for such things as utility, zoning and planning, and ambulance services) account for over one- third of city revenues statewide. In the aggregate, cities are somewhat more reliant on sales tax revenues than on property tax revenues, although this varies considerably from city to city.

Cities tend to be involved in providing a wide variety of direct services to residents as well as in the development of civic infrastructure. Statewide, cities spend about one-fourth of their budgets for public safety activities, including police and fire protection. Many cities, however, leave the provision of fire protection services to some other entity of government.

Spending Per Capita Varies Immensely From City to City

Statewide city budget data masks the great variation in spending that exists among the state's cities. In fact, about half of all California cities spent less than $600 per capita in 1992-93, but 85 cities spent more than $1,000 per capita. The figure below shows the variation in spending patterns among California's cities, excluding the City of Industry, Vernon, and San Francisco (which, as a city and county, is not comparable to other cities).

The disparity in city spending per capita reflects, in part: the existence of special districts providing services that otherwise would be provided by the city; differences in sales tax allocations among cities; and variations in the service level/revenue raising decisions made by individual cities.

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