Jumping in immediately following Barack Obama’s inauguration, SLO County supervisors dove into this year’s budget mess. The upshot: there’s little left to cut from county services, and county officials are looking for ways to raise revenues.
Rising costs and waning revenues have left county officials with a $22 million deficit. Meanwhile the state continues to hold other local funds in limbo. The latest state budget proposal has deferred local payments from the gas tax and other state funds that generally go toward local health and social services. For SLO County that’s about $3.6 million per month being held hostage.
It’s bad, Deputy County Administrator Gail Wilcox admitted, but she said other counties are weeks away from running out of money. She added that the California State Association of Counties is telling county administrators to “not let legislators off the hook.”
A complete picture of SLO County’s financial problems won’t be ready until early February, but the estimate is the budget will be at least $22 million in the hole and potentially as high as $24.5 million, depending on the final property tax revenue.
More than half the deficit can be attributed to mandatory salary and benefit increases under the county’s prevailing wage ordinance. Most departments were able to absorb the increased expense. Other departments, such as planning and building and the sheriff, will need to dip into the general fund.
County officials seemed to steer away from using the word “layoff” but it was clear that cuts are on the horizon. Administrative Office officials estimate there will be a workforce reduction of anywhere from 2 to 5 percent. There will likely be similar cuts next year.
But supervisors wanted to increase the county’s money flow, in other words, tax increases where possible. State law prohibits the county from raising taxes only in the unincorporated areas so a countywide tax increase would require support from all the cities, too.
Supervisors Jim Patterson and Frank Mecham volunteered to be on a subcommittee that will look at tax increases and other ways to boost county revenues.