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L.A. County to cut another 2% in spending

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Los Angeles County officials, facing massive state budget cuts and falling tax revenues, announced plans this week to cut an additional 2% from the county budget, even as they vowed not to lay off workers or cut programs.

The new cuts come on top of the county chief executive's call for departments to trim between 5% and 13% of their spending as part of the $22.8-billion budget that he proposed in April.

More reductions are needed because county tax revenues are expected to drop an additional $100 million by the time the proposed budget is considered by county supervisors later this month, said Miguel Santana, a deputy to the county's chief executive. The 2% cut will cover only $53.3 million of that shortfall.

William T Fujioka, the county's chief executive, said he was working with supervisors to stem the rest of the shortfall but would not say how.

Santana said the proposed budget still has "no layoffs and no cuts to critical programs." But, he said, "everything's on the table once the state acts."

Under Gov. Arnold Schwarzenegger's proposed budget, the county stands to lose nearly $1.5 billion and thousands of jobs, according to estimates released last week. If state officials follow through on the governor's recommendation to cut the Cal Works welfare program for families, for example, 3,000 county employees would be out of work, Santana said.

News of the additional 2% cut came the same day that the county tax collector said that about 237,000 homeowners are behind on their property tax payments. Last week, county officials said they had reassessed downward the values of more than 330,000 homes and condominiums, at the cost of $440 million in annual property tax revenue.

"We are seeking to avoid layoffs at all costs, avoiding furloughs and limiting what we've done to hiring freezes," said Supervisor Mark Ridley-Thomas, who Tuesday proposed granting county contractors a one-year extension in exchange for a 10% cost cut. "We're trying to stem the tide as best we can."

Santana said the county's 39 departments are eliminating vacant positions, or shifting jobs from county to federally funded programs. For instance, the Department of Children and Families is eliminating 43 vacant administrative jobs and shifting about a dozen staff to federally funded programs, he said.

Other departments with smaller budgets, such as Community and Senior Services, are scaling back on supplies, he said.

Before the most recent round, county officials had cut $415 million from the current budget and eliminated 1,684 mostly vacant positions. The county, with more than 102,000 full-time positions, is the biggest employer in Southern California.

Supervisor Zev Yaroslavsky warned Tuesday that "collateral damage" from the state budget crisis probably will worsen by month's end.

"Counties all over the state are facing massive cuts. Some of the counties are being driven to bankruptcy. Not this one, not yet, but there's only so much you can absorb," Yaroslavsky said. "I'm bracing for a very difficult next few weeks."

The state budget crisis already has damaged the county's financial standing. On Tuesday, County Treasurer and Tax Collector Mark Saladino told supervisors that he was forced to delay selling $1.1 billion in short-term notes last week after Standard & Poor's downgraded the county's bond rating due to proposed state welfare cuts. The county plans to put the notes up for sale again Thursday, Saladino said.

Supervisors are expected to begin budget deliberations June 22.

molly.hennessy-fiske

@latimes.com

Credit woes L.A. County is losing top credit rating on $1.1 billion in notes. BUSINESS, B4

Copyright © 2014, Los Angeles Times
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