Board Fears State May Upstage Its Budget Act : Finance: Supervisors approve historic budget-cutting plan but are under ‘big, black cloud’ called Sacramento.

Orange County supervisors gave final approval Tuesday to the most drastic budget-cutting plan in county history, but they remained worried that the state budget could force still deeper local cutbacks in months ahead.

“This is just a short lull until the state completes its budget process,” County Budget Director Ronald S. Rubino said after the Board of Supervisors cast a unanimous vote to approve the 1992-93 budget plan. “We know there’s a big, black cloud hanging over us, and it’s called the state.”

Once the state completes its budget in coming weeks, Orange County officials must revise their own numbers, incorporating actual state funding levels. They plan to hold public hearings based on the new figures in late August.

The $3.5-billion plan approved Tuesday includes millions in cutbacks for local programs as well as potential layoffs for some county staff during the new fiscal year, which begins today. In all, the new budget will mean a decrease of $241 million--or 6.5%--in county spending from last year.

There were no real surprises.

Many of the key choices on how to divvy up the county pot had been made two weeks ago, with health care and mental services hit hardest by those decisions.

In addition to thousands of county residents who rely on these services, about 150 county employees could be hurt by the budget plan.

The supervisors eliminated 258 positions--although more than 100 of these slots are already vacant.

As for the rest, “the layoff notices will be sent out” today, Rubino said.

Officials hope to keep many of these workers on staff by shuffling them into other vacancies created by retirements, promotions and other means. Last year, for instance, the county eliminated 263 positions but ultimately let go only six people, Rubino said. Union officials say they plan to work with the county to minimize the number of actual layoffs as much as possible.

The supervisors agreed to cut county health care services by $5.9 million, or 11.6% of their base budget, and to cut community services such as child-abuse programs and welfare operations by $6 million, or 7%. Law enforcement and court operations--considered the highest priority for funding--were cut by $4.1 million, representing only 1.8% of the base budget.

At a public hearing before the Board of Supervisors on June 16, several dozen community activists sought to dissuade the board from cutting funds that could threaten the very existence of some programs--from a mental health clinic in Garden Grove to the county’s Cooperative Extension agricultural program.

The supervisors offered some sympathy for the speakers at that meeting but stood by the recommendations of their staff and refused to restore any of the recommended cuts. Tuesday’s vote gave final approval to the cuts.

“This was what we expected,” Orange County Health Care Agency Director Tom Uram said after the vote. “We’ll be cutting back severely in some areas by the end of July. Certainly, mental health got the worst of it, but we anticipated this, so we’re taking our lumps like good soldiers.”

In approving the budget plan, supervisors made no specific mention of program cuts or potential layoffs but spoke instead in general terms about the county’s fiscal troubles. They aimed much of their frustration at state lawmakers who are now wrangling with Gov. Pete Wilson over a budget.

Board of Supervisors Chairman Roger R. Stanton sounded that theme when he said that “the way the situation is in Sacramento, we don’t expect pennies from heaven.”

Supervisors were quick to praise the work of county number-crunchers in Rubino’s office, noting that they began the budget process months ahead of schedule in anticipation of tight times. “The budget team this year was just outstanding,” said Supervisor Don R. Roth. Even so, the supervisors said that they are worried about where the state budget may leave them.

“We have tried to get as much stability into this process as possible,” Stanton said after the meeting, “but unfortunately, there’s a great deal of uncertainty hanging over everyone’s heads because of the circus in Sacramento.”

County officials say they are worried about three major prospects out of the state budget talks:

* That as state officials try to decide how to rid themselves of a multibillion-dollar deficit, they will carry out talk of giving the counties “IOUs” to fund programs.

“If they don’t send cash to us, we have no choice but to dip into our reserves or borrow money” to pay for state-mandated programs, said County Administrator Ernie Schneider. Using reserve funds would cost the county an extra $175,000 a month in lost investment earnings, Rubino said.

* That once state officials reach a budget agreement, they will cut some programs by 10% to 15%, leaving the county millions of dollars in the red. Rubino said four programs are most in jeopardy: trial court funding, mental health, health administration and public assistance administration.

Orange County gets about $420 million in state aid a year, with those four programs alone accounting for more than half. If a substantial portion of those funds is lost, Rubino said, “that would be disastrous . . . especially after we’ve now already made one set of reductions.”

* That the state may reallocate to the schools those property-tax revenues that counties are now allowed to use for so-called special districts. Orange County now uses this money--$75.8 million a year--to fund fire, flood control and library special district programs, officials said.

If that money were redistributed to public schools, Rubino said, “we have no idea--literally no idea--where we could make up that lost revenue.”