Gov. Jerry Brown's May revision of the California budget codifies Assembly Bill 440, through which the state will forgive approximately $3.4 million of the $4 million in taxes state auditors said the county underpaid between 1993 and 2001.

“This debt forgiveness for San Benito County is long overdue,” states Assemblyman Luis Alejo (D-Salinas), who authored the bill. “I commend Governor Jerry Brown for addressing this issue and granting relief to San Benito County.” 

In the governor’s May Revise of the 2015-16 state budget released this week, “local agencies in San Benito County [can] participate in an ERAF (Educational Revenue Augmentation Fund) repayment program for which they are currently ineligible. This results in the state forgiving approximately $3.4 million of the $4 million owed,” Alejo's office said in a press release.

The State Controller’s audits conducted in 2005 and 2009 indicated that San Benito County underfunded the ERAF for the fiscal years between 1993 and 2001. The county disagreed with the finding, but agreed to move forward using the methodology recommended by the State Controller’s Office. 

While trying to address the audit’s findings, a subsequent error was made due to the use of an incorrect base year, according to Alejo. "This new error, which unknowingly occurred in 1997, was not detected until a subsequent audit was completed in 2005. That small error that began in 1997 grew to an unmanageable burden by the time it was discovered in 2005," according to Alejo.

This is the fourth attempt by Alejo to relieve San Benito County’s ERAF debt.  AB 1676 (Alejo, 2012) died in the Senate Governance and Finance Committee, and in 2013 and 2014, he worked unsuccessfully to include the debt forgiveness language in the budget trailer bills.

On this fourth attempt, Alejo commended the San Benito County Board of Supervisors and SEIU Local 521 for working with him to get it done.

“With hard work and persistence, I am proud the governor moved to forgive this financial burden to the last county in the state with ERAF debt,” Alejo said.