New Estimates Delay Cuts in County Budget

With the San Diego County Board of Supervisors facing a series of unpopular budget cuts, county administrators have revised their revenue estimates upward by $22 million, allowing the planned reductions to be postponed for at least three months.

Referring to the temporary budget reprieve as a “one-quarter breathing period,” county officials said Friday that the new economic forecast--the result of revised projections and extra funds received since the budget was prepared last spring--could delay until at least October the cuts proposed in vital services ranging from mental health and child-abuse services to anti-crime programs and park closures.

If, as expected, the supervisors seek voter approval in November to waive the county’s so-called Gann spending limit--a proposal narrowly defeated this month--the revised budget proposal could buy enough time so that some of those planned cuts could be scaled back or perhaps even avoided altogether, county officials added.

Wary of Charge of Manipulation

However, wary of being accused of manipulating the $1.3-billion budget for public relations purposes, county administrators insist that the latest figures will simply give the supervisors more time to ponder their options, not eliminate the need for program cuts.

The adjustments proposed by Chief Administrative Officer Norman Hickey are not, in the words of one budget analyst, a “magic solution” designed to make county leaders “look like economic geniuses.” Rather, the revisions simply reflect the constantly changing picture of the county’s expected revenues and expenditures, they said.

“No one was crying wolf when the budget was prepared several months ago, no one was crying wolf last week during the budget hearings, and these are not magic dollars that will make the problem go away,” said Hickey spokesman Bob Lerner. “We have not won the lottery. All this does is give us a three-month cushion to reevaluate the situation. . . . Merlin does not reside in this building.”

In the proposed budget that Hickey submitted to the supervisors last month, he recommended $10 million in cuts that persons both inside and outside of county government agreed would have a major effect on a number of high-profile programs:

- A $5-million reduction in health services funding would mean that nearly half the 11,000 San Diegans now receiving publicly financed mental health care could go without medication and treatment.

- A proposed $2.7-million cut in children services, county officials said, would seriously curtail their review of child-neglect and abuse cases.

- With 20 of the 26 staff positions in Sheriff John Duffy’s crime-prevention unit facing elimination because of a $1-million cutback, critics warned that the effectiveness of the nearly 4,000 Neighborhood Watch programs throughout the county could be destroyed.

- A $300,000 reduction in park operations would eliminate staffing and force eight parks to close.

- Among the other proposed cutbacks, a $500,000 reduction in general planning funds would reduce land-use planning in the county’s unincorporated regions, 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.

However, under the revised budget proposal, funding for those programs will be maintained at current levels for the three months beginning July 1, the start of the county’s new fiscal year. Therefore, any cutbacks in services or manpower in those areas will be deferred until at least Sept. 30.

“The intent was to give the board more time to make its decisions,” county budget analyst Mike Coffield said. “The alternative would have been to give layoff notices and cancellations of services, only to have the board possibly restore some things at the eleventh hour. And that just isn’t workable. This makes for a smoother process.”

But Lerner cautioned that the adjusted budget proposal does not signal a solution to the county’s budget woes.

“This is only a temporary luxury,” Lerner said. “This entire episode may very well be repeated at the end of September.”

The $22-million adjustment, which will increase the county’s budget from $1.245 billion to $1.267 billion, reflects a number of changes that have occurred in the county’s economic outlook since financial officials began preparing the budget last spring. One factor is simply the periodic fluctuation in cost and revenue projections that occurs with any budget.

“We have better information today to base our projections on than we had two months ago when this was put together,” said budget official Stan Bareham.

The county also will draw more revenue, budget analyst Coffield explained, from various sources, including about $5 million in public works funding from gas taxes and federal grants, $4 million in “project carryovers” from the previous year, $3 million in courts funding and $3 million generated by a variety of special funds.

Most of that $22 million, however, is not discretionary, and therefore cannot be used to completely offset Hickey’s original $10-million budget cutback plan. In general, the extra funds must be spent on the programs that generate them, thereby prohibiting their use in some of the critical areas targeted for cutbacks, Coffield said.

The severe budget constraints facing the supervisors stem in part from the Gann limit, a statewide measure approved in 1979 that restricts government spending under a formula based on population and the inflation rate. Now “over” its Gann limit, the county finds itself in the unusual position of being legally prohibited from spending all of the money available to it through through tax revenue and other sources.

But the Gann limit will not affect the county’s ability to spend the additional $22 million because the funds are not tax proceeds, county officials said.

This month, San Diego voters, by a 51%-49% margin, rejected Proposition B, which would have temporarily waived the Gann limit. However, with the county facing a potential $162-million gap between revenues and permitted expenditures over the next five years, county officials plan to place another Gann waiver proposal on the November ballot.

If that measure were to pass this fall, the three-month holding action possible because of the budget adjustments conceivably could soften or--under the most optimistic scenarios--scuttle some of the program cutbacks originally proposed by Hickey. With those programs protected from cuts through Sept. 30, the potential Gann waiver could take effect shortly after its approval by voters in November--thereby confining the budget shortfall to a period of only several months.

Lerner, however, noted that there is a legal question about whether a Gann waiver can be implemented in the middle of a fiscal year or whether it must be in place when the fiscal year starts on July 1.