Deep Budget Cuts Could Hit Health and Social Services

Orange County services, especially in health care and other social service areas, may be slashed next year as county officials try to overcome a $41.5-million shortfall in the 1990-91 budget.

“This is a volcano that has been simmering for years, waiting to explode,” Supervisor Harriett M. Wieder said. “Those social needs have to be addressed, but we’re going to need some more help from the state and federal government if we’re going to do it.”

According to the proposed budget released Friday, available revenues have increased just 1.2% since last year--far slower than the demand for county services--fueling a growing budget crisis that is afflicting many California counties. Although Orange County’s shortfall is less acute than other counties’, mounting costs have drained the county’s reserves, and officials warn that it is only a matter of time before the county must dramatically cut services in order to stay afloat.

In this year’s $3.23-billion budget proposal, county financial planners are suggesting across-the-board cuts of 5% to all county department budget requests. That would make up most of the projected shortfall, which represents almost 10% of the $476.2 million in operational costs needed next year to run county programs, officials said.

Even that figure, however, excludes such construction projects as the Theo Lacy Branch Jail expansion, without which the county would continue to face an acute shortage of jail beds. Including a handful of new construction projects and other expenses, the county’s 1990-91 budget is roughly $80 million in the red, officials said.

On the other side of the ledger, the proposed budget would add to general fund revenue by drawing $16 million out of an account reserved in case the county is sued, leaving the county more vulnerable to lawsuits but helping to alleviate the current fiscal crunch. County officials are also investigating license and contract fees, such as permit and business licenses and the bills charged to city governments that use the county’s sheriff and fire services. Those fees are likely to be hiked in the near future, officials said.

“We’re not trying to cry wolf or be all doom and gloom, but this is serious,” said Karen Davis, a financial analyst in the County Administrative Office, which prepared the proposed budget. “We have to tighten our belts a little bit, and that’s what we’re doing.”

Chief Administrative Officer Ernie Schneider also warned of pressing budget concerns that have strained the county’s ability to maintain its current services.

Persistently low state funding for some state-mandated programs has created most of the county’s budget quandary, but other issues, most notably incorporations by several South County cities, have added to the county’s woes as well. According to Schneider’s report, the recent incorporations of Mission Viejo, Dana Point and Laguna Niguel will deprive the county of $13.6 million it otherwise would have received in taxes next year.

“The goal of the CAO (County Administrative Office) is to present a budget that represents the true cost of doing business at currently approved levels of service,” Schneider said in the budget report. “Since current financing does not support this level of funding, the CAO has reduced department/agency budgets by approximately $25 million, or 5%, in order to balance.”

Although the county’s proposed cuts are spread evenly across departments, the budget picture is bleakest in health care and human service areas. They are grappling with the fastest growth and are also facing the possibility of sharp cutbacks from the state, which is facing huge shortfalls of its own.

Gov. Deukmejian’s proposed budget includes reductions in funding provided to counties for their health care programs. If the Legislature were to adopt those cuts, Orange County’s Health Care Agency could be left millions of dollars in the hole. One proposed cut alone, to the so-called AB 8 program for public health care, would strip the county’s Health Care Agency of $4.9 million, according to Schneider’s report.

“We’re falling so far behind in our ability to cover the local needs it’s almost hard to quantify,” said Ronald R. DiLuigi, the agency’s assistant director. “The biggest question for us right now is what’s going to happen with the state budget.”

Cuts in either the state or county budget for health services could affect such programs as indigent health care, disease control, maternal care and nursing services, DiLuigi said. “Virtually all of those programs would be subject to cut.”

HARD TIMES FOR PRISONS: L.A. Democrats push slash in downtown prison funding.A26

1990-91 COUNTY BUDGET BREAKDOWN

WHERE THE MONEY COMES FROM

MOTOR VEHICLE FEES: 21%

SALES & OTHER: 7%

LEFTOVER FUNDS: 6%

OTHER: 11%

HOW THE MONEY’S SPENT

OTHER: 9%

GENERAL ADMIN.: 7

ENVIRONMENTAL MGT: 7%

HEALTH CARE: 49%

(HEALTH COSTS SOAR: in millions of dollars)

87-88: $379

88-89: $422

89-90: $530

90-91: $609

THE COST OF COUNTY GOVERNMENT

(In billions of dollars)

Orange County has an annual government budget of $3.2 billion. Globally, that puts it somewhere bewteen Peru and Panama in terms of spending. It produces $64 billion worth of goods and services a year, making it roughly the nations’s 10th-largest economy.

1985-86: $1.34

1986-87: $1.38

1987-88: $1.85

1988-89: $2.29

1989-90: $2.81

1990-91: $3.23

Los Angeles Times