L.A. County Fears Disaster Under New State Budget

Los Angeles County’s budget problems will be even worse than first projected next fiscal year if Gov. George Deukmejian’s austere state spending proposal is adopted, the county’s chief fiscal officer said Friday.

Chief Administrative Officer James C. Hankla, in a report to the Board of Supervisors, said the situation has become so grave that the board should consider suing the state for relief if other measures fail. He acknowledged in an interview, however, that such court attempts in the past--even when the county has won--did not necessarily translate into actual dollars won.

Hankla, in a detailed analysis of the spending plan unveiled last week by Deukmejian, said the county will come up nearly $170 million short in the coming fiscal year if the governor’s proposals are approved by the Legislature. Earlier, Hankla had forecast a $153.2-million deficit for the 1987-88 spending year beginning July 1 unless some existing programs are eliminated.

By law, the county must have a balanced budget each year, so if no new source of money can be found to cover the projected shortages, programs and services will have to be cut. The budget for the coming year is now being prepared and will be issued in the spring.

The main culprits in the projected county deficit increase are a proposed $18.6-million reduction in Medi-Cal reimbursements from the state and the continuing stalemate between the Legislature and Deukmejian over how best to pay for certain health programs for the working poor. That dispute could lead to a $10.2-million shortage in programs that technically ran out of money Dec. 31 but that are still continuing.

Offsetting part of the shortfall are Deukmejian’s proposals to increase children’s services funding in Los Angeles County by $13.3 million.

Not factored into the projected money crunch are possible employee wage hikes that will be negotiated after current union contracts expire in September.

To head off the deficit, Hankla proposed a number of initiatives that the county should propose in Sacramento. The most significant would involve Los Angeles County launching a pilot project beginning July 1 in which the state will take over local funding of the superior and municipal courts, a move that could save up to $163 million. Deukmejian has proposed awaiting the enactment of court efficiency measures before the state takes over the county’s burden.

Three weeks ago, Hankla asked all county department heads to propose reductions of 6.5% to make up the earlier projected shortfall. The latest forecast could mean even larger cuts. Most of those reductions are still being identified and will not be made public until early next month, Hankla said Friday.

Already, some departments that are expected to exceed their current year’s budgets have enacted hiring freezes and laid off temporary workers to help alleviate some of the projected deficit, Hankla said. Among them, he said, are the Children’s Services, Health Services, Mental Health, Sheriff’s and Facilities Management departments, which are expected to exceed their spending programs by a total of as much as $34 million.

Hankla told the board that Deukmejian’s plan to eventually return some funding responsibilities to local governments “will have both a positive and negative impact on county budgets.” But he added that the governor wants to wait until the 1988-89 budget to enact the types of programs that could erase Los Angeles County’s fiscal crunch.

On the plus side, Hankla said the governor’s idea of eliminating $477 million in certain state mandates, particularly on health services, could give the county about $132 million next year. Deukmejian is not proposing that the county receive any additional funding, but instead that local governments be given total control over how to spend what they do receive.

The county would also be in line for $52 million more if Deukmejian’s plan to give counties a quarter-cent of the state sales tax wins approval.

The disadvantage of the governor’s proposal, Hankla said, is that these measures would not take effect for at least a year. He also noted that Deukmejian’s idea to eliminate certain health mandates already has attracted strong opposition from key legislators, including the leaders of both houses, Assembly Speaker Willie Brown (D-San Francisco) and Senate President Pro Tem David A. Roberti (D-Los Angeles.