When the Board of Supervisors decided to take a long-range approach to solving its incipient budget problems a few years back and named it “the five-year pain management plan,” it may have been overly optimistic.
In a new look at county budgets for fiscal years 2011-12 and beyond, Dan Buckshi, assistant county administrator, wrote that “a seven-year plan seems more likely, due to the economic recovery taking longer than previously forecast.”
As the county prepares to enter the fourth year of its plan, Buckshi also alluded to the continuing state fiscal crisis. “The actions (or rather inaction) of the state government are extremely troublesome,” Buckshi wrote in a 27-page report to be discussed by supervisors Tuesday.
This year’s gap in the state budget was $19 billion, he said, and the state’s legislative analyst projects $20 billion gaps for four years.
County budgets are tightly tied in with the state budget because the state orders the county to carry out some programs, most notably in health and welfare. If the state doesn’t pay for those, or ponies up late, it leaves the county, its taxpayers, and beneficiaries in a bind.
“Any loss of revenue from the state would be accompanied by commensurate reduction of expenditures (i.e. program and service level reductions would be made),” he wrote.
Buckshi cited other “key indicators (that) remain stubbornly problematic,” including the struggling housing market and unemployment, which “continues to be of tremendous concern.”
If there is any good news, it is that the county has not laid off anyone while reducing the work force 10 percent through attrition and retirements. “There are few other counties in the state that can note this achievement,” Buckshi wrote.
Nonetheless, Buckshi wrote, the year ahead appears to promise “more of the same.” He added that the projected county budget deficit for 2011-12 is “at least $9.2 million.” Gaps over the past three years have been $18 million, $30 million and $17 million.
Labor negotiations are another wild card, he wrote. A 1 percent across-the-board increase would add $2.2 million to the gap.
On Tuesday, when supervisors go over the report, they plan to discuss the way they negotiate with unions.