The Unkindest Cuts . . . : County’s Financial Crisis Leaves Little Room for Discussion, Much for Debate

San Diego County’s proposed $1.2-billion fiscal 1989 budget fills two volumes nearly 3 inches thick. More than 1,150 pages in length, the budget books are composed of a mind-numbing array of program descriptions--often written in governmentese--and seemingly endless columns of figures, charts and organizational diagrams.

But one need read no further than Page 7 to discover the Rosetta stone to the budget deliberations that the Board of Supervisors began last week. For, on that page, Chief Administrative Officer Norman Hickey outlines about $10 million in proposed cuts--many of them in vital health programs--that he argues are needed to cope with what he describes as the county’s “most difficult fiscal crisis since the passage of Proposition 13” a decade ago.

One Unattractive Alternative

Although that $10 million represents less than 1% of Hickey’s proposed billion-dollar budget, several factors leave no doubt that those proposed cuts are, in the words of Supervisor Brian Bilbray, “where the action is” in the budget deliberations that will continue through midsummer.

Wary of being accused of manufacturing a false crisis to highlight their budget problems, county officials emphasize that, even if the supervisors opt to restore some of the $10 million in cuts proposed by Hickey, every dollar restored will have to be cut from other areas.

Because of legal spending limits facing the county, the $10-million reduction is non-negotiable, although there is one unattractive alternative that could be used to reduce it. The supervisors could choose to tap into the $4-million contingency reserve in Hickey’s budget, but county administrators argue strongly against that, noting that the money, set aside to deal with unforeseen events over the next year, represents less than one-half of 1% of the budget.

The high-visibility areas where the proposed cuts fall, ranging from mental health and child-abuse services to crime-prevention programs and park closures, virtually guarantee controversy. Passionate protests from advocates for those programs have already been heard, and the tone is expected to become more vitriolic this week when the board tackles the proposed health service cutbacks.

In addition, although the $10 million is a relatively small part of the overall budget, it is a major chunk of the dollars over which the board has total discretionary control. Out of the $1.2-billion budget, more than $1.1 billion is devoted to myriad programs required by state or federal law, including welfare, social services, jails and indigent defense.

Indeed, the massive budget includes only about $32 million in discretionary funds, for which the county’s decisions “aren’t dictated by Sacramento or Washington,” said Supervisor George Bailey.

Bailey often reiterates that startling statistic to deflect suggestions that a $1-billion-plus budget ought to provide enough flexibility to avoid the kind of Draconian health-care reductions and other major cuts being contemplated.

“People look at that $1.2 billion and think you can do almost anything,” he said. “But we can’t touch most of that.”

‘We’re Just a Funnel’

“Basically, we’re just a funnel or pass-through agency for most of the budget,” said Supervisor John MacDonald. “In terms of areas where we have control, it’s really rather small.”

And that brings the supervisors back to the $10 million in cuts proposed by Hickey, who says the proposed 1989 budget is about $54 million less than needed to maintain current levels of service.

That shortfall exists despite the fact that the $1.2-billion proposal actually is $71 million, or 6%, higher than the county’s current budget. But $55 million of that increase is confined to state-mandated programs--thereby again tying the supervisors’ hands on its use--and the remaining $16 million is insufficient to cover increased costs attributable to inflation and routine growth in operating expenses, county administrators say.

About $5 million of Hickey’s proposed cuts would affect county health services, with most of that involving mental health programs. Now budgeted at $48 million annually, the county’s mental health programs, designed to provide treatment to acutely disordered persons unable to afford private care, would drop to $44 million next year under Hickey’s proposal.

Since the original budget estimates were prepared, officials have learned that the $5 million in mental health reductions would, in turn, cause the loss of another $2.5 million in patient revenue and other funds, according to Assistant Chief Administrative Officer David Janssen. That would bring the mental health cuts alone to about $7.5 million.

Under the proposed budget, children’s social services would be cut by about $2.7 million, a reduction that critics warn would seriously impair child-abuse prevention programs. Similarly, a proposed $1-million reduction in the Sheriff’s Department crime-prevention unit could weaken Neighborhood Watch programs, while other proposed cuts would force the closure of eight county parks, eliminate ambulance service in remote areas of the county and terminate day health care for frail seniors.

No Easy Choices

“No one is saying that these aren’t necessary services or worthy programs,” Janssen said. “But the cuts have to come from somewhere, and there just are no easy choices. Everyone realizes that these cuts will hurt.”

Some of the funds cut from those programs would be shifted to other high-priority areas, with more than $20 million being targeted to cover operating costs for new jails as well as increases in programs such as indigent defense, general relief and welfare.

General workload increases would have required another $54 million, Hickey said, but only about $6 million will be provided to offset the higher demands for services attributable largely to a growing population.

“You could assume higher productivity by our workers, but I think we passed that point in this county a few years ago and that we’re about at peak levels now,” Janssen said. “The reality is that the district attorney, for example, may end up having to dismiss more cases . . . and that paper work, licenses and other services for the public will get backed up.”

In the early rounds of the budget debate, distressing scenarios have emerged about the proposed cutbacks’ potential impact:

-- Of the 11,000 San Diegans now receiving publicly financed mental health care, nearly half would go without medication and treatment. Those left untreated, county officials and others argue, would present bigger problems for the police and hospital emergency rooms, as well as swell the county’s homeless population.

-- The proposed $2.7-million cut in children services, county officials say, would seriously curtail their review of child-neglect and abuse cases. Increased workloads have already forced the Department of Social Services to limit case assignments only to children “at significant risk of abuse and neglect,” with “borderline referrals” being screened out, Hickey said in a memo to the supervisors. About 500 children monthly who previously would have had a face-to-face meeting with a county social worker to assess their situation no longer would do so, Hickey noted.

-- With 20 of 26 staff positions in the sheriff’s crime-prevention unit facing elimination, critics warn that the effectiveness of the nearly 4,000 Neighborhood Watch programs throughout the county could be destroyed if that cut is enacted.

-- A $300,000 reduction in park operations would eliminate staffing and force the closure of eight parks: Otay Lakes, Wilderness Garden Preserve, Louis Steltzer Park, Quail Gardens, Eucalyptus Park, Lincoln Acres Park, Goodland Acres Park and the Mt. Helix Amphitheater. Park supporters emphasize that closing the parks actually would cost more than keeping them open because of layoff costs and the expense of barricading the facilities.

-- Among the other proposed cutbacks, a $500,000 reduction in general planning funds would reduce land-use planning in the unincorporated regions of the county, a $58,000 cut would eliminate a program to protect grazing and agricultural resources, and cuts totaling $301,000 would end senior day health care and staff support for other senior programs.

The severe budget constraints facing the supervisors stem partly from San Diego voters’ narrow rejection earlier this month of Proposition B, which would have temporarily waived the so-called Gann spending limit. A statewide measure approved in 1979 that restricts government spending under a formula based on population growth and the inflation rate, the Gann limit has placed the county in the unusual position of being legally prohibited from spending all of the money available to it through tax revenue and from other sources.

Will Try Again on Gann

With the county now “over” its Gann limit, the 51%-to-49% defeat of Proposition B will prevent the county from spending about $2.2 million in taxes and from taking advantage of about $35 million in state revenue for courts. Over the next five years, the limit could produce a $162-million gap between revenues and expenditures, according to county estimates.

However, the supervisors, encouraged by the close vote and faced with that stark economic forecast, plan to place another Gann waiver proposal on the November ballot.

Because Hickey’s proposed budget was released shortly before the June 7 election, opponents of Proposition B suggested at the time that some of the targeted reductions arose more from political gamesmanship than economic necessity.

Charging that county officials were “trying to scare voters into supporting” the Gann waiver by painting grim alternatives, Jack Sanders, president of United Taxpayers of San Diego, predicted last month that some of the deeper proposed cuts “will be softened or disappear entirely” after the election.

“That’s absolutely not the case,” Janssen said in response, adding that the budget hearings now under way will refute any lingering suspicions that the proposed cuts were simply an electoral stratagem.

“Anyone who thought this was just a way to get Prop. B passed and that we’d back off afterward will see that’s not going to happen,” he said. “The fact is that the county is facing a crisis situation that’s going to get worse, not better.”

‘Crisis’ May Be Right Word

Although the word “crisis” is perhaps the most overused term in government, some private budget analysts believe the description is appropriate in this instance and that county officials are not overstating their fiscal problems.

“The cynic in me says that we’ve seen this approach used before where some serious budget cuts are proposed but never end up being made,” said Mark Nelson, executive director of the San Diego Taxpayers Assn. “But, with so much of its money earmarked, the county’s been moving toward this point for years. I really don’t think this is a case of crying wolf.”

From the county’s perspective, a factor that figures more prominently in this year’s budget problem--and which, over the long term, is of considerably greater consequence than the Gann limit--involves San Diego’s longstanding feud with the state over alleged inequities in the distribution of property taxes and other revenues.

In lawsuits filed against the state, the county charges that it has been shortchanged by Sacramento by more than $130 million annually. Bolstering that argument, San Diego officials point out that the average per-capita allocation of general revenues for counties during fiscal 1986 was $220.26, contrasted with $159.37 for San Diego, the second-lowest out of the state’s 58 counties.

“If we were just getting our fair share of taxes, we wouldn’t have these problems--we’d have plenty to spend,” Supervisor Susan Golding said.

Ironically, however, even if San Diego were to win its lawsuits against the state, the Gann limit would prevent the county from spending more money.

Battles for Another Day

For purposes of the current budget debate, however, both the Gann limit and the county-state funding dispute are battles for another day that will not be resolved in time to alleviate the unpleasant choices confronting the supervisors.

Most of the supervisors acknowledge, however, that there is a clear link between the proposed cuts--primarily those in health care services--and the county’s displeasure over state-mandated programs for which Sacramento provides inadequate funding.

The proposed multimillion-dollar reductions in mental health and child abuse prevention programs, for example, consist of what is called the county’s “overmatch”--funds the county spends on those programs beyond what is legally required to match state grants. Given the county’s antipathy toward Sacramento, the message inherent in targeting such crucial services for cuts seems obvious.

“It’s a very fair interpretation to view this as sending a signal to Sacramento,” Golding said. “The state has got to get out of the business of dictating every little nut and bolt for the counties but not providing the money to do those things. The state has put all counties, and especially San Diego, in the position of being fall guys. It’s a shell game, a farce, a sham, and the citizens are the ones getting dumped on.”

Although he has heard similar remarks from Golding’s colleagues, Janssen argues that attempting to shift citizens’ wrath to Sacramento was not the primary intent behind the proposed cuts.

“The intent wasn’t to stick this in the nose of the Legislature,” Janssen said. “It’s just that this is one of the very few areas in the budget where the county has the ability to reduce expenditures. Unfortunately, that discretionary authority overlaps some very critical services.”

Supervisors Must Decide

For that reason, the budget finally approved by the supervisors could differ substantially from that proposed by Hickey. Most supervisors oppose at least some of the proposed cuts, with the mental health program, child protective services and parks heading the list. Supervisor Leon Williams even goes so far as to say he will fight cutbacks in all of the areas targeted for budget reduction under Hickey’s proposal.

“To me, the kind of human pain that those cuts would generate just isn’t worth it,” William said. “It’s socially unintelligent and is going to cost us more in the long run. I think we have to look for alternatives.”

But when asked to specify those alternatives, Williams said he is hesitant to do so now for fear that any such suggestions would prompt the formation of new battle lines as advocates of other programs rush to protect their turf.

Meanwhile, with the supervisors scheduled to begin making tentative budget cuts next week, Bilbray perhaps best framed the daunting task facing them.

“Nobody likes these cuts . . . but to avoid them we might have to dig up some sacred cows and have a barbecue.” He paused briefly, then, chuckling softly, added: “And hope that we’re not the ones who get burned.”