June 28, 2011 > Budget passed in the face of uncertainty
Budget passed in the face of uncertainty
Submitted By Santa Clara County Public Affairs
The Santa Clara County Board of Supervisors unanimously approved a balanced budget for Fiscal Year (FY) 2012, on June 17, 2011. The County's total approved budget including all services, operations, capital improvements and reserves is $4 billion. The $2.1 billion General Fund budget reflects the proposed spending plan for all discretionary and many mandated services for the fiscal year beginning July 1, 2011. The net number of positions eliminated is 309.
"We've had to make tough decisions to close the $219.6M revenue and expenditure gap but I'm pleased we were able to do so with ongoing reductions," said President Dave Cortese, Santa Clara County Board of Supervisors. "As difficult as some of these decisions were, they were necessary and will allow the County to better prepare for the tough times ahead related to the continuing State budget deadlock."
The Board's action is the culmination of an extensive budget planning and review process, including workshops and public hearings attended by residents, community organizations and employees who advocated for various services and programs.
Spending Controls and New Revenues Ease Problem
Spending controls put in place earlier in the year and a modest improvement in sales tax revenue increased the savings in year-end fund balance and improved the financial outlook by $10.8M. These fund balance savings, along with $11.1M in expenditure savings were among the $24.5M in resources used to both restore some services and set aside reserves in anticipation of State budget impacts.
The lack of resolution of the State budget problem continues to create uncertainty for counties. The Federal budget problems are also a challenge. To prepare for the uncertainties and mitigate a loss of revenue at the State, Federal or local level, the Board set aside $9.9M in ongoing reserves, and $5.4M in one-time reserves for possible bridge funding. Additionally, to improve the County's cash position, $2.5M in one-time funds were allocated to a potential cash reserve.
The reserve funds will enable the Board to offset the loss of any planned revenue source and take additional action prior to eliminating services. Fortunately, the County's discretionary revenues have improved over the past few months, mostly due to improved sales taxes statewide. More than $7.3M in additional sales tax revenue is expected by the end of FY 2012.
Critical Services Maintained
These improved revenues enabled the Board to restore several critical safety net and public safety services that were proposed for elimination.
"Although community-based organizations had to take 25 percent cuts, the Board voted to restore $1,503,066 in funding which was proposed for elimination," said Cortese, who also serves as Chair of the Board's Children, Seniors and Families Committee. "This will allow more than 50 community based organizations to continue serving children, seniors and the most vulnerable members of our community."
Many of the restorations approved at the hearings were for public safety and justice, as this area was deeply cut in the original recommended budget and is likely to be hard hit by state budget reductions. Two positions were added to the Cold Case Unit and one position to the Conviction Integrity Unit of the District Attorney's office to bring closure to outstanding cases and investigate claims of wrongful conviction. In addition, eight positions were restored for FY 2012 in the Probation Recovery Services Unit to address those prisoners to be released from state prisons that become the responsibility of the County under realignment. Four deputies were restored to the Rural Crimes Unit and Unincorporated Patrol to assure the continuation of the current level of service to the unincorporated areas of the county.
"As the realignment of responsibilities from the state to counties becomes clearer, we will revisit the budget. More cuts are unavoidable," said Supervisor Ken Yeager, Chair of the Board's Finance and Government Operations Committee.
Pharmacy coverage at Valley Health Center in Milpitas and Sunnyvale were restored. The hours will be 9 a.m.-5 p.m., at Milpitas and 9 a.m.-9 p.m., at Sunnyvale. The addition of evening medical appointments in Sunnyvale will improve access to much needed care and reduce waiting times.
"The Tax Collector's Office has a backlog of nearly 23,000 negative supplemental reassessments and 3,000 assessment appeals because of the downturn in the real estate market," said Supervisor Mike Wasserman. "We are adding three temporary positions to address this backlog. We owe it to taxpayers to reconcile the tax bills and issue any refunds in a timely manner. This will save the County interest payments and taxpayers will receive their funds sooner."
Since FY 2003, the County will have closed cumulative gaps between revenues and expenditures of more than $2 billion. Although the economic picture has improved in recent months, the future remains unsettled. The budget is balanced with a $75M placeholder, expected to be filled once labor negotiations are completed with the majority of its bargaining units. It remains to be seen how soon the $75M gap will be closed.
"The challenge before us is to balance the budget without totally devastating essential client services," said County Executive Jeffrey V. Smith. "It wasn't easy recommending compensation and benefit reductions for employees; however, moving in this direction will enable us to balance the budget without extensive use of one-time funds and reset the base budget to put us in a stronger position going forward."
State Hits Hard at Local Government Services
In making more than $25M in reductions related to State actions, an additional 17.5 positions were cut, and the impacts to clients are tremendous. They will be felt most by CalWORKs clients and their children, whose aid payments and services will be reduced significantly. In addition, if the Governor's "May Revise" proposals for FY 2012 were to be enacted, the potential negative impact to the County could range from $20M - $40M. One factor in the outcome is the disposition of proposed sales tax extensions that fund $17M in critical public safety programs.