No Layoffs, Jail Closures in County Budget : Government: But CAO Ernie Schneider has a caveat: Things depend on how the state resolves its own $4.7-billion shortfall. A $9-million hole in the library system’s program is a problem.

For the first time in three years, Orange County government officials are proposing a budget that does not include layoffs or jail closures.

But as in previous years, County Administrative Officer Ernie Schneider warned Monday that the county’s financial health will ultimately depend on how the state resolves its estimated $4.7-billion budget shortfall.

“We’re a little better off this year than in previous budgets but there are still too many unknowns,” Schneider said of the 1994-95 budget proposal distributed to county officials Monday. “I think we’ve come to a point where it would be difficult to cut any more. We’re not talking about putting people out on the street.”

Schneider said the county will plan to provide about the same level of funding it did in last year’s $3.5-billion budget and hope that additional revenue can be found to fill a projected $9-million hole in the county library system’s spending program.

“There’s no denying that the libraries are in deep trouble again,” Schneider said. “We either raise more revenues or we cut services. But there is time to find more money.”

Possible answers to the library funding problems are expected to be presented within the next several weeks in a report from a special library task force created earlier this year to deal with program shortfalls.

While preserving the 27-branch library system appears to be the county’s most critical budget concern, the trouble does not compare with money problems last year when Sheriff Brad Gates threatened to close the James A. Musick Branch Jail and the County Fire Department faced a 50% reduction in staffing.

Although those public safety concerns were later resolved without budget reductions in the fire or sheriff’s departments, the state did take $148 million from Orange County in a shift of local property tax revenues to plug state government’s own budget deficit.

The shift is permanent and leaves Orange County with only $108 million in available property tax revenue next year, a 58% reduction from the county’s 1992-93 budget year.

That loss, however, will be partially offset in 1994-95 by a stunning $84 million increase in projected interest earnings by county investments over last year.

County Treasurer/Tax Collector Robert L. Citron, who manages the county investment portfolio, was sharply criticized by his political opponent before his reelection last week for pursuing overly aggressive investment strategies.

“I think we had a pretty successful year, no matter what anybody else says,” Citron said.

Schneider said the investment earnings essentially filled the hole created by the loss of property tax funds and will help keep other programs on pace with last year’s level of funding.

“I don’t know how much longer we can count on (Citron) to manipulate the market like he does,” Schneider said. “We owe him a big ‘thank you.’ ”

With the gains in interest earnings and other revenues holding steady, Schneider said there are no immediate plans to continue a series of staff reductions which sliced about 2,000 positions from various county departments in the past three years. Only about 100 of the job cuts required layoffs.

Despite the permanent loss in property tax revenue and continued problems with library funding, Board of Supervisors Chairman Thomas F. Riley said Monday that the budget proposal offered some long-term financial hope.

“I think there are signs that we’re beginning to recover,” Riley said. “We’re trying new things to retain businesses and there seems to be more building activity going on. They are all signs that things are trying to be improved.”

But Supervisor Harriett M. Wieder said she would reserve judgment until the state resolves its own deficit. She said the county needs to be prepared in the event the state looks to local government again to solve its budget problems.

“I find things encouraging, but we’re not home free yet,” she said.