L.A. County expects reduced welfare rolls to help fill budget shortfall

Los Angeles County officials are counting on a surprising source of revenue to fill their expected $76-million budget shortfall: shrinking welfare rolls.

As the economy soured, the number of people receiving general relief from the nation’s largest local government had swelled from nearly 63,000 in fiscal year 2007 to an estimated high of almost 108,000 in 2011. But county officials expect that figure to shrink by almost 7,000 people this year, which could lead to an estimated $27.4 million in savings.

Combined with other savings and some increased revenue, the drop in welfare payments should be enough to fill the expected gap.

There will be “no major reduction in anything we do,” William T Fujioka, the county’s chief executive, said at a news conference Monday.

The nearly $24-billion proposed budget is $565 million less than last year’s. It calls for eliminating 2,100 unfilled positions but does not include any furlough days or layoffs. The budget also includes money to hire 185 more employees and make repairs and upgrades to hospitals, parks and beaches.

Unlike previous years, county departments will not have to make any cuts, although many unions agreed to accept pay freezes.

County supervisors are scheduled to hold public hearings on the budget starting in May.

The drop in welfare recipients is a sign that the economy is improving and that a recent campaign to move people from the county’s assistance system to the federal one is working, several people said.

The Board of Supervisors in 2010 approved a $7-million program that more thoroughly evaluated people on county welfare to see if they were fit to work or qualify for federal benefits if they were not.

County general relief is meant to be a short-term bridge for people who don’t get state or federal aid and is capped at $221 a month. Some people with more serious, permanent disabilities can qualify for federal Supplemental Security Income, which often provides bigger payments.

Since then, about 2,000 more people have switched to the federal system each year, according to the most recent county figures. And since 2011, there has been a nearly 25% increase in the number of general relief recipients who have started working each month.

“The county started to recognize that the investment does result in a return … so they can spend the money elsewhere,” said Antionette Dozier, a staff attorney with the Western Center on Law and Poverty.

Supervisor Zev Yaroslavsky pointed out that the number of people on general relief is still far higher than before the recession started and that the county could still shift more people to federal assistance.

“We’re doing a better job, but I don’t think we should take a victory lap yet,” he said. “I don’t think our efforts have gotten the kind of traction they will get.”

The proposed budget was based on revenue projections that may not be as rosy as predicted by County Assessor John Noguez. In December, Noguez estimated that the county’s property tax base would grow by $18.7 billion next fiscal year. But earlier this month, he revised that to $5.1 billion, which could lead to the county receiving about $50 million less in property tax revenue.

Noguez blamed the difference on a drop in home values during the last part of the year, but supervisors seemed skeptical and ordered an audit of his report and of the assessor’s office.

Fujioka said he wanted to wait for the results of the audit before predicting how the county could deal with the loss of expected revenue but said he believed it would not have a serious effect.

“I’m confident we can manage this,” he said.

jason.song@latimes.com