SANTA ANA (CNS) - Orange County supervisors today will begin discussing how to fill a $290 million shortfall as they come closer to approving a 2020-21 fiscal year budget.
The Sheriff's Department and the Orange County District Attorney will be asking to restore some proposed cuts from county administrators, but it may be a tough sell for some supervisors.
“Obviously, if we give more money to one department we have to take from another,'' Supervisor Lisa Bartlett said.
This year, county officials expect to balance the budget with reserves.
“The county can't continue to sustain themselves going budget to budget cycle drawing from reserves. That's not a good plan'' beyond this year, Bartlett said.
“One of the reasons we have such a big shortfall is because we had to expend significant funds up front'' Bartlett said.
A good deal of the money was earmarked to combat the spread of COVID-19, and much of that money was spent providing social services linked to a collapse of the economy under quarantine conditions.
“We don't have a backup from the state'' for those expenses, Bartlett said. And state officials are begging for a backup from the federal government, she acknowledged.
The proposed budget will use reserves mainly to hold the line against mandated furloughs and layoffs.
The $7.5 billion proposed budget for the 2020-21 fiscal year is approximately $706 million more than the 2019-20 budget.
County CEO Frank Kim said when the budget was released last month that the county cannot count on dipping in reserves beyond this year.
“We're concerned about fiscal year '21-'22, because we're using quite a bit of reserves this year,'' Kim said. “If the trend doesn't reverse and the economy doesn't recover we'll have a bigger bite out of reserves the following year and that's not a sustainable path.''
Normally, the budget is adopted in June, but this year the Board of Supervisors approved a placeholder for legal reasons and waited to see the impact of the state budget on revenue locally. The recommended budget is expected to be reviewed and discussed by the board on Tuesday and voted on Sept. 15.
“We started the year with about $700 million in reserves,'' Kim said. “We did a pretty good job over time building our reserves. But reserves are supposed to be used in times of a catastrophic events, so we don't feel terrible about using them, but we want to make sure it's sustainable.''
The county saved about $43 million with a voluntary retirement or buyout program, cutting 476 employees from the payroll. More staffers may be trimmed from the payroll as the program is extended through Oct. 8.
“There will be an impact on services... There will be less bodies providing county services,'' Kim said. “We're providing enough funding to the filled positions, so no mandatory layoffs or furloughs.''
The budget includes $554 million from the coronavirus relief bill. The county put aside $111 million to cities and small businesses for coronavirus-related expenses. The county also received an additional $73.3 million from the state allocated in the bill.
The county's forecasters expect to see a 16.4% decrease, or $53.3 million, in Proposition 172 funding, which is devoted to law enforcement. The county expects to see a total loss of $145 million in sales tax revenue.
The Proposition 172 half-cent sales tax is expected to come in about $271.5 million with 80% going to the sheriff's department and the rest to the District Attorney's Office. Last fiscal year, the county collected $324.8 million in Proposition 172 revenue.
The county has allocated $890.1 million in general purpose revenue, $16.5 million less than the last fiscal year. The county will spend about $38.7 million in reserves and will see about $24.6 million more in property taxes.
Photo: Getty Images