Financial Tumult Hits County from All Sides, Leaving Red Mark

Staff forecasts a general fund deficit of $8.9 million as supervisors peer into a bleak future.

By Sonia Fernandez, Noozhawk Staff Writer | Published on 02.04.2009

Between ongoing local budget problems, California’s projected $42 billion deficit and the national recession, Santa Barbara County can’t do much but dig in its heels and ride out a financial storm that could last through the next fiscal year.

County officials at Tuesday’s Board of Supervisors meeting predicted an $8.9 million shortfall in the county’s general fund for this fiscal year, which they attribute mostly to the timing of payments due to the county. If payments due to the Fire Department come through, they say, the deficit could be significantly less.

Santa Barbara County’s general fund piggy bank is awash in red ink, with a projected $8.9 million deficit this year. (iStock photo)

Five county departments that rely on the general fund are expected to end this fiscal year in the red: the District Attorney’s Office and the Clerk-Recorder-Assessor, General Services, Probation and Public Health departments.

“Probation will need help to make it through the budget year despite cuts,” County CEO Mike Brown said. The department, which had to make severe cuts last year, will likely come before the supervisors for assistance in the near future, he said.

Also taking a hit are the county Fire and Sheriff’s departments, which have not been paid yet for overtime during last year’s Gap and Tea fires.

And if the Clerk-Recorder-Assessor’s office has to handle a special election this year, which is a possibility given Gov. Arnold Schwarzenegger’s current budget proposals, the county may have to front the money in the face of uncertainty that the state will pay it back. The county had three elections last year: the presidential primary, the state primary and the November general election.

Revenues are expected to decline through the end of the fiscal year, including supplemental property taxes, franchise fees and sales taxes. For the Mental Health Services fund, the department of Alcohol, Drugs and Mental Health is carrying $32 million in ongoing liabilities with Medi-Cal payments and other mental health costs, which could seriously impact the county’s strategic reserve.

According to budget expert Jason Stillwell, the county will try to make up the shortfall with a combination of reserves and spending reductions for this fiscal year, which ends June 30. The county still must reduce expenditures and service levels into the next fiscal year to balance that budget, he said.

Meanwhile, budget activity on the state level is not encouraging. California’s projected $42 billion shortfall — out of a $103 billion general fund budget — has the state looking everywhere to fill in the gap, with results that could be “potentially devastating” to local budgets.

Schwarzenegger’s proposed 2009/10 budget plan includes some $17 billion in expenditure cuts, with another $14 billion in anticipated revenue.

A large portion of this revenue would come through a state-imposed 1.5 percent sales tax increase for the next three years. Sales tax may also be extended to services that don’t traditionally charge such a fee.

Another portion would come through the $5 billion in revenue anticipation notes — essentially a loan — that would not have to be repaid until June 2011.

As for the reductions, county staff said the largest cut would be to education. Sacramento is looking to cut Proposition 98 funds, which would otherwise go to K-12 education. Cuts to higher education budgets are also a possibility, as well as cuts to early education funds like Proposition 10, half of which is targeted for diversion back to the state.

Proposition 63 funds, meant for mental health services, are also being eyed by Sacramento, which has already issued a statement declaring that payments will be delayed to local agencies because of lack of cash. Transportation funds, gas tax and social service payments may be held up for months. State grants to the Sheriff’s Department, as well as to juvenile probation, may be the next on the chopping block.

The state budget, according to Brown, is something of a moving target, as Sacramento is trying to put together a plan for the next year and a half.

“It’s so late in the 08/09 fiscal year,” he said. “They’re trying to adopt a plan which fixes it over the remaining months of the fiscal year up to June 30, 2010.”

Write to sfernandez@noozhawk.com

Comments

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» RKV on 02.05.09 @ 04:25 AM

Across the board cuts are the wrong thing to do (with the exception of retirement benefits, which need to be wacked hard). Cut programs instead. And repeal regulations so there is no need for enforcement (for example, our planning process is slow, expensive, and for a large part unneeded [sorry Pearl, but you’ve been dead a long time]). Otherwise all you get is slow and or selective enforcement. As to new capital construction, like a north county prison? Well, given our weather, put the criminals in tents like they do in Arizona. We need an effective government, just much less of it than we have now (fact: 4300 odd employees as of last year). And yes, we should sell some assets (land) to pay down our bonded indebtedness.

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» Blame the Liberals on 02.05.09 @ 06:43 AM

The liberals and government unions have destroyed california, 42.000 extra state workers hired in the last few years. The state needs to Cut the number of workers and their salaries.

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» Concerned Citizen on 02.05.09 @ 08:29 AM

The elephant hiding under the rug here is the huge number of illegal immigrants and their families who are draining the State’s coffers. We cannot afford to such a vast number of underpaid workers in the style to which we have become accustomed. This is why their are limits to the number of immigrants allowed into the country. Our State has been overwhelmed by people who have children that occupy over fifty percent of our schools, seventy percent of our jails, use expensive emergency rooms like a free clinic, and pay a fraction of these costs in taxes. There is a price for cheap, slave labor and the employers - yes you and I who use them to babysit, mow lawns, cook food, and build - must pay the price for allowing this flood of humanity into our State. We cannot afford high salaries and generous benefits on the backs of these woefully underpaid men and women. This is the problem with our State budget.

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» Cut Government wages on 02.07.09 @ 07:51 AM

Cut Government wages and staff—they are 35% overstaffed and paid—

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» Government employees get 16 weeks off on 02.09.09 @ 07:56 PM

The 3-5 months off a year could be a reason all government agencies are going bankrupt bankrupt. Tell me one thing government does well, other than spend your money on itself?

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» thotplickens@gmail.com on 02.10.09 @ 06:51 AM

“Probation will need help to make it through the budget year despite cuts,” County CEO Mike Brown said.

Do you really think that the truants—-who have been pushed into the School to Prison Pipeline so that Cirone can have his “jail schools” and the districts can dump their struggling students and raise their test scores—-are a worthy cause for probation officers?

Couldn’t probation officers dump the truant students from their case load and ask that the schools educate and engage them?

Couldn’t the SBSD stop paying police and probation $890,000 and provide interesting and worthwhile programs with that money?

Couldn’t the $100,000 for an “Outreach Worker,” since he’s a part of the police department, couldn’t he be paid by the police instead of the “Pupil Retention” school funds? (Ed. Code says he’s supposed to have “Drop Out Prevention” course work—-and know how to keep the students in school, not push them into the School to Prison Pipeline.)

The schools have a full-time billing agent to bill Mental Health and Medi-Cal for services that they already are paid to provide but they don’t—-Speech and Language, for example. That’s “double-dipping” for “double-dereliction.”

Pathetic.

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