Report Predicts County May Go From Black to Red : Budget: Though the county may have a surplus this fiscal year, officials say state cutbacks could mean a shortfall of at least $43 million next year.

Because of belt-tightening measures among various departments and innovative ways of raising new revenues, the county may end the current fiscal year with a $3-million surplus instead of a $13-million shortfall, as previously predicted, officials said Monday.

However, in a midyear financial report to be presented to the Board of Supervisors today, officials said the county could face a shortfall of $43 million to $60 million during the 1991-92 fiscal year, which begins July 1. The the biggest reason for the dire prediction is a recent report from the state saying it is facing its own record $12.6-billion shortfall, officials said.

“That scares us,” said Ronald S. Rubino, associate county administrative officer. “They (state officials) are going to balance their budget partly by reducing what they give to the schools, to the cities and to the counties.”

The predictions for the huge county shortfall for next year underscore how vulnerable the county is to fluctuations in state funding. Rubino said about a third of the county’s general fund revenues come from the state, and last fall’s gloomy projections of a $13-million deficit came after the state cut $22.4 million in funding to the county.

In the report to be presented today, County Administrative Officer Ernie Schneider said the county managed to overcome not only the cut in state funding but also decreased revenues in property taxes and motor vehicle fees. The solution has come largely through efforts to stay within the budget and by finding new revenue sources.

For example, the county has imposed an administrative fee to cities and school districts for collecting and distributing their property taxes. The fee is expected to bring in $16.5 million, $2.5 million more than had been predicted last fall.

The county also imposed a hiring freeze on most positions, and a system was put in place to closely monitor each department’s spending.

The report also notes that the Board of Supervisors canceled $2 million worth of budgeted capital expenditures.

“A proactive approach of addressing our problems early and ‘living within our means’ has limited the impact of our fiscal constraints,” Schneider wrote.

However, the predicted shortfall in the next fiscal year will occur partially because of staffing costs for the new expansion of three county facilities: the Theo Lacy Jail, the Probation Department’s Intake/Release Center and the Orangewood Children’s Home.

Also adding to the predicted shortfall will be caseload increases in health-care programs and social services, partially because of growth in population, Rubino said. He added that the county is also negotiating with several of its employee unions on salary increases for next year.

“That means that we have to start thinking now of prioritizing or of coming up with new funding sources,” Rubino said. “What this really reinforces is how dependent we really are on the state. It tells the board that we have to continue our efforts to cut our budget.”