June 29, 2007

County Report

Work continues on closing the budget deficit

By Supervisor Pete McHugh
Special to the Times

The County Board of Supervisors adopted a fiscal year (FY) 2008 budget on the morning of June 15 that closed a deficit of $227.2 million.

During three days of budget hearings prior to June 15, the board recognized $13.4 million in new revenue and increased the recommended budget’s net expenditures by $12.4 million. The final FY 2008 budget for all county operations anticipates $3.56 billion in revenues and it authorizes expenditures of $3.78 billion. For FY 2008, the board set staffing for all operations at slightly less than 15,250 full time equivalent (FTE) positions.

The county’s general fund supports most county operations and for FY 2008 the board has adopted a $2.2 billion spending plan. When compared to the adopted general fund budget from last June, the county shows growth in revenues and spending but a decrease in authorized positions. General fund revenue has increased by almost $115 million over last year’s $1.9 billion for a 6 percent increase. The county has budgeted $103.4 million more in general fund spending that amounts to almost a 5 percent increase. The adopted general fund budget reduces authorized positions over last year’s adopted budget by 265 FTE positions that equals almost a 3 percent decrease.

The revenue and spending increases over last year’s budget obscure the county’s difficult financial situation that leads to the reduction in positions. The county faces its sixth straight year of general fund budget deficits. The cost of providing the current year’s level of general fund services in the next fiscal year continues to grow faster than the increase in revenues. The county calls this cost the current level budget (CLB) and the FY 2008 general fund current level budget totaled about $2 billion, $227.2 million over anticipated income.

The County Executive in May presented the board a sobering and challenging balanced general fund budget. It closed the projected deficit with $152.5 million in departmental solutions and $74.7 million in planned use of one-time resources to cover ongoing operations. It also kept the contingency reserve at 4.7 percent of revenues adjusted for revenues the county passes to other jurisdictions, which was the same percent as in June of 2007. Within those constraints, the County Executive recommended reducing current level budget spending by almost 2.5 percent and eliminating almost 6 percent of the work force’s positions, or over 550 positions.

Health, public safety, and general government departments contributed 95 percent of these positions. Almost 70 percent of the 550 positions came from the county’s general fund health departments while public safety departments contributed 15 percent of the total. The County Executive identified over 60 positions in general government departments for elimination that represent approximately 11 percent of 550 positions.

In the adopted general fund budget, the board reallocated $39.4 million in spending that included funding for over 200 of these eliminated positions. Even with these restorations, the final general fund budget reduces CLB staffing by over 350 FTE positions and spending by approximately $35 million. The departments that received major allocations to restore critical safety net services and the positions these allocations funded include:

$16.3 million in mental health and 90.5 FTE positions

$10.2 million in public health and 73.5 FTE positions

$8.3 million in drug and alcohol services and 9.0 FTE positions

$1.3 million in social service agency contracts with community based organizations

$0.8 million for school-linked community health services and 6.0 FTE positions

$0.5 million in the District Attorney’s office and 2.0 FTE Attorney positions

$0.3 million in the Public Defender’s office and 2.0 FTE Attorney positions

In the final budget, the board saved some current services while only slightly improving the board’s budget challenge next year. The final budget this year used $138 million in departmental solutions while next year, staff projects the county will have to identify $128 million. The board will face deficits each year until our society agrees on statewide and nationwide solutions that adequately fund health and human services to those in need.