Households and the federal government may talk about living within their budgets, but counties and cities actually have to do it.
Balancing the municipal checkbook resembles an extreme sport this year with deep cuts and painful choices. Riverside County’s projected $5.03 billion 2009/2010 budget includes a $100 million decline from the previous year, almost all of which must come from the $627 million general fund.
“Riverside County’s economy has been based so solidly on the housing market that when the foreclosure crisis hit and building all but disappeared, unemployment increased, property-tax valuations declined and sales-tax revenue fell sharply,” explained Riverside Public Information Officer Raymond Smith.
Because Proposition 13 values are reset by foreclosures, tax revenues could fall another 10 percent next year. Compounding the bad news is a projection that public safety sales tax revenue could also take a $30 million dive.
Riverside County isn’t accustomed to red letter days. This reversal of fortunes comes after a decade of double-digit increases that ranged from 10.5 percent to more than 22 percent.
“We took budget cuts this year, plan 10 percent cuts in general-fund discretionary spending next year and expect to take cuts in each of the subsequent two years,” Smith added.
Merit raises are now a thing of the past and furloughs are no longer just for the military.
Like other elected officials across the state, the Riverside County Board of Supervisors established priorities and apportioned funding to fit those priorities.
Public safety accounts for more almost two-thirds of discretionary revenue. Health and sanitation, public assistance, general government and debt service make up the bulk of the remainder.
In the state capital, the City of Sacramento’s $875.1 million 2009-2010 budget proposal released on May 1, including a drastic measures to close a $50 million deficit. “It is a challenge to provide levels of service provided in the past when contractual obligations are actually increasing,” said Leyne Milstein, Sacramento finance director.
The city saw the bad news coming and instituted a new Essential Services Planning program in February that looked at every department to evaluate what it does, how much it costs to do it, how many people it employs to do the work and how the department can increase revenue or cut costs. Some departments were required to cut 35 percent of their budget by cutting services such as voter outreach and animal control patrols.
Net general fund for FY 2008-2009 was $284 million. That at least marginally flexible pot of money for FY 2009-2010 was down to $264 million, a 7 percent decrease.
Since the 3,180 full time equivalent positions paid for out of the general fund equal nearly 85 percent of all discretionary expenses, administrators focused on curbing these costs. A total of 387 positions were unfunded on top of the 20 percent budget reduction from the current year. Some of those cuts will come from attrition, but almost 200 layoffs could be necessary.
Non-public safety employees remain on one-day a month furloughs and frozen salaries. Union negotiations resulted in an agreement with the Sacramento Police Officer’s Association to freeze salaries in exchange for tabling layoffs of 65 officers. A similar proposal is on the table for the fire department where 43 positions could be eliminated if the contracted raises go into effect.
Talks continue with other unions. “If they are willing to make some cuts then we can go back and talk about reinstating some services,” Milstein said. However, even that option could be clouded if revenues continue to fall.
This year’s cuts could be the first shoe to fall. More than $8 million in one-time resources was used to close the gap. “There continues to be a structural gap between ongoing revenues and expenditures,” warns the budget summary.
JT Long can be reached at email@example.com.