With budget deliberations barely two months behind them and a projected $43-million deficit looming ahead, Ventura County supervisors agreed Tuesday to start planning now how to balance next year's budget.
"Quite frankly, it's been said these projections are too conservative. But these projections may just be too optimistic," county Auditor-Controller Tom Mahon told the board.
Ventura County can expect to lose more state funding, pay more into its retirement accounts and continue spending millions more than it receives, Mahon warned the board.
Without some changes, he predicted, revenues would fall $43 million short of expenditures in the budget year beginning next July. The current budget is $880 million.
Supervisors agreed to set up a staff committee to study the problem and report back early in November. The board would receive reports throughout the year, rather than concentrating its efforts in the weeks before budget approval.
"One of the main intents is to get started early," Supervisor John K. Flynn said. "No matter how you paint it, the situation is getting worse. We don't know what the state is going to do."
But county employees, who have been hit hard by five successive years of budget cuts, say Mahon's approach to budgeting is unduly conservative, yielding huge reserve funds while slashing public services.
"If your goal is to amass large amounts of cash, then his assumptions are working," said Barry Hammitt, executive director for the Service Employees International Union, Local 998. "But if your goal is to provide services to the citizens of Ventura County, then you're missing the mark."
The union went so far this summer as to hire an accounting firm, which concluded that county analysts consistently overestimate expenses and end each year with leftover funds. What's more, the county has $44.6 million sitting in a workers' compensation fund--an account most large counties keep at about $7 million.
The supervisors took $1 million out of that account and eliminated 59 jobs and some services to balance the current year's budget, but appear reluctant to dip further into reserve funds.
"I don't think we should be spending down all of our reserves," Supervisor Maggie Kildee said. "I don't believe we've seen the worst of times yet."
In fact, Kildee and other supervisors believe that the $11 million in state reductions they faced over the summer were mild compared to what lies ahead. With statewide elections behind them, lawmakers are expected to cut deeper into the county and city accounts in the coming year.
"As long as we deal in a prudent manner, there's no reason that the county of Ventura can't live with whatever they throw at us," Mahon said.
Beyond the state reductions, new actuarial calculations for retired county employees indicate that the county needs to be investing more in its retirement funds. That could cost the county $5.8 million extra in next year's budget, Mahon said.
Even without these changes, the county simply is not taking in the revenue it needs to pay continuing salary increases and maintenance costs, he said. Through the 1980s, the county's shortfall--the difference between revenue and the cost of maintaining services--averaged $7.2 million.
In 1992 it climbed to $9.6 million and in 1993 it was $15.4 million. In July's budget deliberations, supervisors faced a $35.8-million shortfall, according to Mahon's figures.
To change that trend, supervisors need to restructure county government--eliminating entire programs and changing the way services are delivered, Chief Administrative Officer Richard Wittenberg said.
The staff panel will study restructuring efforts and return to supervisors for direction, he said.