San Luis Obispo County is maintaining its slow and steady fiscal improvement, but state and federal political fights continue to create uncertainty, the county’s top administrator told the Board of Supervisors this week.
“The key message is patience, and slow and steady,” county Administrative Officer Dan Buckshi told the board Tuesday as part of a forecast for the 2013-14 fiscal year. “Things are improving.”
He said the county is in year five of its “7-year pain plan,” instituted to keep the local government on steady ground. Buckshi and his predecessor, Jim Grant, as well as the current Board of Supervisors, have done their part, although not without cost.
“Programs and services have been scaled back,” Buckshi noted, “but dramatic cuts have been avoided.”
During this half-decade, the county has shrunk its workforce by 245 full-time employees, or 9 percent, and, in collaboration with its unions, has instituted such reforms as a two-tier pension system.
However, Buckshi also said that political intransigence in Washington and Sacramento, as well as the unknown fate of Gov. Jerry Brown’s November ballot proposal to raise taxes for state government, give smaller governments a case of the fiscal jitters.
The county government receives a substantial portion of its income from state and federal dollars, in part because it is carrying out laws and programs that the state and federal governments impose on it.
In Washington, “the level of political polarization remains troubling,” Buckshi wrote in his report. “It appears the two major political parties are unwilling and unable to reach a middle ground. As a result, long-term economic solutions remain elusive.”
He paid particular attention to what he called the “new buzzword — the fiscal cliff,” which he described as a confluence of dire events threatening the nation if Republicans and Democrats in Congress do not work together before Jan. 1 to head them off.
Those events include expiration of the Bush-era tax cuts; expiration of extended unemployment benefits; expiration of a payroll tax holiday; and $1.3 trillion of automatic spending cuts, a process known as “sequestration.”
“In and of themselves, any one of these events would negatively impact the economy; combined, they could be catastrophic,” Buckshi wrote. He said there is a threat that the country could “dive back into a very significant recession.”
Unease about finances at the state level is just as problematic, Buckshi wrote. “The state’s financial condition continues to be the single largest threat to the county’s budget.”
Despite these swords hanging over its head, the county is doing what it can, Buckshi said, and pointed to several positive signs that things are getting better. Transient occupancy taxes, a measure of tourism, are up, for example. And the housing market is improving, with median prices and volume both up.
Buckshi’s report, as well as a series of attachments going into detail, can be read at the county’s website, under the Board of Supervisors agenda for Oct. 9.