Wednesday, August 15 , 2018, 11:52 pm | Fair 71º

 
 
 
 

Local News

County’s Budget Experts Paint Bleak Picture

'Disturbing trends' in revenue may mean a $1 million fiscal-year shortfall in the General Fund

County budget experts Jason Stillwell and Bob Geis painted a bleak picture Tuesday as they outlined the county’s budget situation and made projections for the end of the fiscal year.

Citing “disturbing trends” in the drop of revenue, particularly from sales taxes both local and statewide, they projected that the county’s General Fund will end up somewhere in the neighborhood of $1 million short by the end of the year. The news comes despite recent transfers between funds and from the county’s strategic reserve the board has approved to soften the blow. By July, the county’s $25.3 million 2008-09 strategic reserve is projected to be whittled down to about $18.1 million.

Part of the reason for the deficit lies in the delays by departments in reducing services to compensate for the loss of revenue, causing some departments to spend more than they make.

“The revenue can decline faster than we can react by reducing county expenditures,” Stillwell said. Deficits in supplemental property taxes, interest earning, franchise fees and property transfer taxes are projected to come up short in filling the county’s $196 million budget for general revenues.

Two departments in particular, he said, are expected to end in the red: the district attorney ($754,000 estimated shortfall) and probation ($600,000 estimated shortfall). General discretionary funds are also projected to end about $443,000 below budget by the end of the fiscal year, Stillwell said.

The mental health services department’s ongoing liabilities with Medi-Cal and Medicare also are expected to put a strain on the General Fund. The department owes about $12 million, and another potential $14.4 million liability with the state for its Multi-Integrated Services to Children program may also have to be reckoned with, if the county can’t convince the state of California that it approve the program and its spending.

“The only source to pay them back would be the General Fund,” Stillwell said.

On the other hand, according to Stillwell, some funds are expected to balance out — the road capital maintenance fund and the social services fund. Others are expected to end positive, such as the vehicle operations funds, workers’ compensation and the county liability fund, which has been storing up money toward litigation the county has won.

According to Stillwell, sales taxes, including the statewide Proposition 172 public safety sales tax and local sales taxes, have suffered steep declines in the past year, with the Prop 172 tax showing a potential drop of 21 percent from the same time last year. Local sales taxes and vehicle license fees are projected to be down about 10 percent each by the end of the fiscal year.

Still, Geis said, sales taxes are volatile, so projections may not hold unless the economy picks up..

“They’ll be the first to recover, too,” he said.

What has not yet appeared in the discussion was the effect of the stimulus money from the American Recovery and Reinvestment Act. That, Stilwell said, will be the topic of upcoming board meetings.

Noozhawk staff writer Sonia Fernandez can be reached at .(JavaScript must be enabled to view this email address).

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