Tax revenues are up for Stanislaus County, but are not keeping pace with increasing costs, say county staff.
The recovering economy has created an unexpected $5.5 million in discretionary income for the county this year, $5.3 million of which can be attributed directly to higher-than-expected tax revenues.
But even with that additional revenue, discretionary funding remains more than $35 million – 20 percent – below its 2007-2008 peak. And new costs are piling up.
“We can't be lulled into thinking that things are getting better because our revenues have increased,” said District 2 Supervisor Vito Chiesa. “Our list of exposures is getting even longer.”
Stanislaus County staff currently forecast a $14.7 million deficit in 2012-2013. Some of that shortfall can be addressed with $9.2 million in savings, but a $5.5 million gap remains – before considering the potentially detrimental effects of the upcoming state budget, or needed county facility repairs.
Surging retirement costs, up 25 percent next year, drive much of that increase. Increasing demand for state mandated – but underfunded – programs like In-Home Supportive Services, foster care, and medically indigent adult health care amount to a further $7 million of the shortfall.
Public Safety Realignment will send former state prisoners to county jails and local probation, though state funding to the counties isn't expected to cover the additional operational costs. And that doesn't begin to consider the extra costs of building a larger county jail and repairing the existing juvenile facility to house those excess prisoners – anticipated at upward of $85 million.
Next year's presidential election will cost the county up to $500,000 in ballot printing and mailing fees.
Redevelopment agencies have been eliminated statewide, leaving the county with no means to fund future infrastructure projects.
And should voters not approve the extension of the library's one-eighth of a cent sales tax, the county could be forced to find millions in funding, or shutter libraries.
The myriad challenges have county leaders holding off on celebrating the higher-than expected tax revenues. The projected shortfall for next year remains despite endless, sharp cuts, of 12 percent to most departments on 2009-2010, 9 percent in 2010-2011, and up to 30 percent this year.
“Our work is not done,” said County Chief Operations Officer Patricia Hill Thomas. “We must continue to remain vigilant.”
Some of the shortfall might yet be mitigated through labor negotiations. Eight of 12 bargaining groups have agreed to an additional 1 percent pay deduction starting July 1, raising their total deduction to 6 percent. But the four remaining groups represent two-thirds of the county work force – and a further $1.7 million to the county budget.
Currently, the county expects to allocate mostly flat funding next year, with most shortfalls covered by carryover funding. But if some labor groups don't agree to the pay deduction, their departments will have to absorb those costs with cuts.
Two more layoffs came Tuesday — an employee in the assessor's office and one from the Children and Families Commission. But there's a bit of a silver lining even in that, say staff, as these layoffs differ from the 879 reductions in force since the county employed 4,603 workers in 2007-08.
“Unlike some of our previous reductions in force, which have been driven by a lack of revenues and resources, these have really been driven by (lack of) workload,” said County Assistant Executive Officer Stan Risen.
And supervisors agreed to create 19 new positions, 18 of those in the Community Services Agency. That agency is now just 11 employees below their all-time high, with the need for social services growing sharply in the down economy.
But as Stanislaus County continues to hone in on its core mission with smaller budgets, further cutbacks in some departments remain nigh inevitable.
“It is imperative that this organization remains vigilant in continuing to find efficiencies,” County CEO Monica Nino said.