State Spending Plan Worsens O.C. Prospects

Orange County government, already desperate for funds, was shoved toward the fiscal abyss by the state budget enacted late Tuesday night, according to local officials who spent Wednesday trying to assess the damage.

Officials said county programs could be cut across the board, jeopardizing services for the poor, law enforcement for areas served by the Sheriff’s Department and management of the county’s growth. The county Hall of Administration may even have to shut off the air conditioning to save on utility bills, Supervisor Harriett M. Wieder suggested.

“The state dumped its problems on us,” Wieder said. “It’s going to mean a loss of jobs, reductions of services. . . . There are no sacred cows.”

Beset by recession and incorporations of new cities, Orange County government already faced a record budget shortfall of more than $60 million, and local officials had pleaded with the state for some relief. Rather than help out local governments, however, the state budget will only make matters worse, county officials said.

“The information is still trickling down from Sacramento,” Board Chairman Gaddi H. Vasquez said. “But it’s a gloomy situation.”

City governments also will feel the pinch, though they are less directly affected by the state budget than is county government. Cities got little if any relief from their financial woes, and the state Legislature declined to revoke the controversial jail-booking fees that allow counties to charge city governments for the prisoners they bring to county jails.

But it is the county governments that have been rocked most noticeably by the state’s spending plan.

For instance, the state took away the counties’ authority to charge school districts a fee for collecting property taxes. That alone will cost Orange County an estimated $4.5 million.

Cuts in state funding for running courtrooms also are under consideration. Orange County could lose $4.5 million to $5 million in that area, officials said.

And even as it was stripping away some sources of local revenue, the state shifted responsibility for administering huge public health and mental health programs to county governments. That should not cost the county any additional money this year, but it could in future budgets, a prospect that Supervisor Don R. Roth decries as “shift and shaft.”

All told, county officials said the new state budget, far from helping close the county’s deficit, actually could force them to trim at least another $10 million from the budget to make ends meet. The total shortfall could top $70 million, some officials warned, though county budget experts have yet to produce a precise estimate.

County officials said an extension of the emergency hiring freeze imposed last year is all but inevitable. Layoffs also are considered likely, new construction projects will have to be postponed or canceled, and cutbacks in services such as law enforcement and environmental management will be on the table.

Some services could be eliminated altogether, and any service that is not mandated by the state or federal government is considered a candidate for cutting, officials said.

Air conditioning in the county Hall of Administration may be turned off in the summer, and heating shut down during the winter, Wieder said.

Vasquez added: “It will run the gamut. It has to. I don’t think any department will be spared.”

Other supervisors were equally distressed.

“I was briefed this morning, and it’s very depressing,” Supervisor Thomas F. Riley said. “This is the worst news since I joined the Orange County Board of Supervisors 17 years ago.”

Supervisor Roger R. Stanton, though declining to point to specific areas where cuts might have to be made, said he was prepared to consider all options.

“This year looks pretty bad,” he said. “I’m not going to be easy on accepting the standard answers from departments.”

Nor was the bad news confined to county leaders. Although cities are less directly affected by the state budget, local mayors said their situation is not much better.

“Have we heard anything that’s good? No,” said Anaheim Mayor Fred Hunter. “We’re in a recession, and we’re not getting any help.”

Los Alamitos Mayor Pro Tem Ronald Bates, who also is the president of the Orange County division of the California League of Cities, agreed that local governments do not expect to see much relief in the near future.

“For the most part, the county and the cities are in similar positions,” Bates said. “We’re both victimized in some respects by the state budget.”

Some actions by Sacramento, however, have helped to sharply divide local city and county governments. In particular, the jail-booking fee that the state authorized last year sparked outrage by city officials, who complained that the county should not impose the fee even though it had been approved by the state.

City officials in Orange County lobbied hard to have that fee revoked this year, in the process greatly irritating the Board of Supervisors, whose members are counting on the revenue from the fee to pump about $6 million into the county budget. The cities have so far failed to get the fee revoked. That helps the county but saddles municipalities with millions of dollars in new expenses.

Cities may also lose a portion of such revenue sources as vehicle license fees and cigarette taxes, Bates said.

“It’s all very uncertain at the moment, but it doesn’t look good,” he said.

In addition, cities continue to be hurt by the recession, which has taken a toll on sales tax revenue, a bulwark of municipal financing. As part of the state’s effort to close its $14.3-billion budget gap, Gov. Pete Wilson won approval for a 1 1/4-cent sales tax increase, but cities will not share in that bounty.

Moreover, city officials are worried that the increase may discourage consumers from making the purchases that would help local economies rebound.

“They’re not going to go out and buy a car with these new sales taxes,” Anaheim Mayor Hunter said. “Our sales tax dollars are down, and they’re going to continue to be down for a while. That’s trouble for us.”

County Picks Up State Burdens

Orange County assumes the financial burden for some state programs and loses some revenue under the new $56.4-billion state budget. Additional state sales tax revenue provides little comfort.

The county:

* Will assume responsibility for $121.9 million in state programs for mental health, indigent health, in-home supportive services, foster care and children’s services.

* Could lose $5 million a year for operating courts.*

* Will lose $4.5 million in property tax collection fees that would have been levied against school districts.

* Will gain sales tax revenue to pay for the programs it inherits from the state. Increasing costs, however, could force the county to trim the services or ask voters to approve a tax hike.

* Note: Action on this proposal is not complete, but estimates are based on legislation that is pending and expected to be approved.

Source: County administrative office, state budget officials