|Budget Issue:||Modify Local Agency Ethics Mandate|
|Program:||Commission on State Mandates|
|Finding or Recommendation:||Eliminate future costs related to the local agency ethics mandate by modifying state law to make payment of compensation or expense reimbursement to local elected officials optional for all local governments.|
Chapter 700, Statutes of 2005 (AB 1234, Salinas), requires local governments to (1) adopt written policies detailing the circumstances—if any—under which elected officials are entitled to reimbursement for expenses and (2) provide specified ethics training to elected officials who receive a salary or other form of compensation.
Mandate Decision. In its review of Chapter 700, the Commission on State Mandates (CSM) found that state law makes it optional for most local governments to provide compensation or expense reimbursement to elected officials. Thus, the requirements of Chapter 700 are not a state-reimbursable mandate for most local governments. However, state law makes payment of compensation and/or expense reimbursement compulsory for a small number of local governments—specifically, general law counties and certain special districts, such as harbor districts. For these select local governments, the CSM found that the above-described requirements of Chapter 700 constitute a state-reimbursable mandate. Initial claims for reimbursement under this mandate have not yet been collected and reviewed. Therefore, the costs associated with implementing this mandate are unknown.
The Governor’s budget proposes to suspend the Chapter 700 mandate in 2013-14. State law (Government Code 17581) is not clear regarding local agency requirements when the state suspends a provision that constitutes a mandate for only some local agencies. However, we think the most likely interpretation of state law is that suspending the Chapter 700 mandate would make its provisions optional for all local governments, not only those local governments for which it has been found to be a reimbursable mandate. As the CSM has yet to issue a statewide cost estimate, the annual state cost of funding the Chapter 700 mandate is uncertain.
In our view, there is no obvious reason that a small number of local governments should be required to pay compensation or expense reimbursement to elected officials while this policy is optional for the majority of local governments. In addition, it is not clear that the state—as opposed to local governments—should pay for the development of local government policies intended to improve accountability to local residents. Therefore, we recommend the Legislature eliminate all future costs related to this mandate by modifying state law to make payment of compensation or expense reimbursement optional for all local governments. By doing so, the Legislature would standardize state policy on local elected official compensation and maintain the requirements of Chapter 700 for all local governments without incurring any future mandate reimbursement costs.
Alternatively, if the Legislature wishes to maintain the requirement that certain local governments pay compensation or expense reimbursement to elected officials, we recommend that the Legislature modify Chapter 700 to explicitly exclude them from its requirements. While this would reduce the statewide scope of Chapter 700’s provisions, it would be preferable to an annual suspension of Chapter 700 because it would (1) clarify that the measure’s requirements apply to most local governments and (2) avoid having the state pay for costs more appropriately born by local governments.