Stanislaus County expects more cuts in $1B budget

Costs up, revenue down, and CEO says state's pain won't help

By TIM MORAN
tmoran@modbee.com

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The nearly $1 billion Stanislaus County expects to spend in the next fiscal year reflects some serious belt-tightening, but probably still is overly optimistic, county officials said Friday.

The projected $957.33 million budget for 2008-09 is 1 percent higher than last year, and uses $5.9 million left over from the current fiscal year to balance revenues and expenditures.

The increase reflects rising costs for items such as employee salaries and insurance premiums.

SPENDING REDUCTION STRATEGIES

Here are some of the strategies Stanislaus County is using to balance the 2008-09 interim budget:
- Building higher fund balances in the current fiscal year by reducing spending by 2 percent, since last February.
- Targeting a 3 percent reduction for all general fund departments.
- Eliminating a planned $3 million set-aside funding for the expansion of the county's public safety center.
- Suspending the annual $1.5 million payment to the county economic development bank.
- Maintaining a "no backfill" policy for reductions in state and federal programs. Programs will be reduced or canceled if state or federal grants are cut.
Breaking it Down

Here's how the county interim budget shakes out by priority:
- A Healthy Community, which includes the Community Services Agency, the Health Services Agency, Behavioral Health and Recovery Services, Child Support Services, Children and Families Commission, and the Area Agency on Aging-Veterans Services: $453.7 million, up from $420.3 million this fiscal year
- A Strong Local Economy, which includes the Alliance WorkNet and the library: $23.44 million, down from $26.2 million this year
- A Strong Agricultural Economy-Heritage, which includes the agricultural commissioner's office and the cooperative extension: $4.7 million, same as this year
- A Well-Planned Infrastructure, which includes the Public Works Department, environmental resources, planning and community development, and parks and recreation: $120.4 million, up from $111.8 million this year
- Efficient Delivery of Public Services, which includes county elected officials, the chief executive officer's office, the Board of Supervisors, the county counsel, the general services agency and the strategic business technology department: $187.8 million, down from $189.5 million
Total allocated staff positions, 4,462, down from 4,603 in the 2007-08 final budget

In the general fund -- which pays for things such as law enforcement and the justice system, planning and economic development, and parks and recreation -- the county expects to spend $255.35 million in the coming year, down from $278.9 million for 2007-08.

Revenues from property taxes and sales tax are predicted to decline for the first time in memory, said county Chief Operating Officer Patty Hill Thomas. Discretionary revenue, money not specifically earmarked for a program, is expected to decline by $3 million.

"We are really starting to see the effects of the economy," Hill Thomas said.

All general fund departments were asked to reduce their budgets by 3 percent, but some high-priority areas, such as law enforcement, were given a reprieve. The Sheriff's Department was given funding to fill five vacant positions, for instance, and programs in the Behavioral Health and Recovery Services were given extra funding.

The interim budget eliminates a $3 million set-aside for an expansion of the public safety center and suspends the annual $1.5 million funding of the county's economic development bank.

Program cuts could mean layoffs

The budget probably is optimistic despite the cuts, said Rick Robinson, county chief executive officer, because of the deteriorating budget situation in Sacramento. The state budget deficit for the coming year is estimated at $17 billion, and cuts to state programs such as Medi-Cal directly affect the county budget.

The county's final budget is due in September after the state budget is approved, and likely will include more cuts, Robinson said. The fiscal year starts July 1.

One of the county strategies to cope with cuts in federal and state grants and programs is a "no backfill" policy, meaning the county won't try to continue programs when federal and state money dries up. That likely will result in layoffs when programs get canceled, Robinson said in a budget letter to county supervisors.

State budget cuts in programs such as Medi-Cal can have a dramatic effect on the county, because patients who no longer qualify for Medi-Cal likely would become medically indigent, and the county would have to pick up the cost of serving them.

"Most of the cuts that have a direct impact on our customers have already been made," Robinson said Friday. He cited staff reductions in the building department, cutbacks in staff and hours at the county library system, and the sale of the county mental hospital.

"Many of the very, very difficult decisions have been made in this fiscal year in preparation for the 2008-09 budget. We didn't wait until the budget was due," Robinson said.

The interim budget is available online at www.stancounty.com/budget. Copies are available at county library branches.

A public hearing on the budget is scheduled June 10 at 9:15 a.m. in the basement chambers at 1010 10th St. in Modesto.

Bee staff writer Tim Moran can be reached at tmoran@modbee.com or 578-2349.