Ailing Butte County Scrutinized by Budget Experts Here

After a quick review of Gov. George Deukmejian’s proposed $53-billion state spending plan for the next fiscal year, Orange County budget analysts are hoping for answers from the small, financially troubled county of Butte.

“Butte County is kind of a bellwether,” said John Sibley, Orange County’s chief budget analyst. “It is like a forecaster.”

Last year, the Northern California county announced that it was $3.5 million short of balancing its $130-million budget. Butte County officials claimed that they had cut services as much as possible and said further reductions “would impede their ability to maintain a viable county government.”

The state Department of Finance conducted a study of Butte County to find permanent solutions to its fiscal problems. Officials from other counties, including Orange County, are watching developments in Butte. They hope to find answers to the financial strain on counties caused by the increasing cost of state-mandated programs.

According to the legislative analyst’s office in Sacramento, Butte County officials threatened at one point to seek bankruptcy protection in federal court. The state deferred a $2.8-million payment from Butte for fire services from the California Department of Forestry and Fire Protection.

Officials attributed Butte’s financial problems to increasing costs of programs that the state mandated at a time when the county’s revenue was stagnant.

The County Supervisors Assn. of California said that the proposed state budget would shift $838 million of health and welfare costs to the counties.

“Clearly, the shift of more than $800 million of health and welfare services onto counties greatly accelerates the ‘county fiscal crisis,’ ” the association said in a statement. “The state should either assume the full cost of providing needed county services or reduce the levels of services required.”

Although Orange County officials just began studying the proposed state budget, they said the proposed cuts in money would put still more pressure on the Board of Supervisors to balance the county’s budget.

Sibley said Orange County’s financial concerns, certainly not as serious as Butte County’s, also stem in part from state-mandated programs, especially in the area of health and human services. He said that for each year the state fails to fully fund the programs the county, with its growing population, has to make up more of the shortfall from general funds.

In the county’s current $3-billion budget, expenses of health and human services account for just over $500 million. Community safety, which includes the Sheriff’s Department, the district attorney’s office and the public defender’s office, has a budget of $544 million. Environmental management, which includes supervision of harbors, flood control and land planning, spends $774 million. General services and administration of the county will cost $1.3 billion in the coming fiscal year.

Last week, Deukmejian proposed a 1990-91 budget that would boost spending by 7.3%. At the same time, the $53.7-billion spending plan would cut $1 billion in aid to counties, the poor, the aged and the disabled.

Sibley said that if the cuts to the counties remained, Orange County “would have a hard time meeting the health and human services budget.”

Board of Supervisors’ Chairman Don R. Roth complained that the state orders a program and funds it only for the first year or so.

“As the population grows, the programs become more expensive. After awhile the state is coming up with only 70 cents to fund each dollar needed to run the program,” he said.

With little discretionary money, the county becomes financially strapped.

There was some good news for Orange County in the governor’s proposed budget:

$30 million to help pay for the Santa Ana River flood control project, which is designed to lessen the threat of floods in case of heavy rains.

$13.7 million for land acquisition and improvements in Chino Hills State Park.

$17 million for further renovation of the Amtrak San Diegan line, which runs through Orange County and provides eight trains daily from San Diego to Los Angeles.

In addition, funds will be available to help first-time home buyers in Orange County and other areas of California with higher-than-average property costs. The plan would provide loans with as little as 5% down and help people earning $70,000 or less who are buying a home for a maximum $205,000.