Projected Budget Deficit for Ventura County Climbs to $46 Million : Finances: Auditor controller warns it could go even higher if state cuts exceed an expected $5 million.

Ventura County’s projected budget deficit has climbed $4.6 million to $46 million, partly because of a loss in property tax revenues, officials said Thursday.

In a report to the Board of Supervisors, Auditor Controller Thomas O. Mahon warned that the county budget deficit could go even higher if state budget cuts exceed an anticipated $5 million.

“Again, the projected deficit is an informed estimate,” Mahon said in his report. “The estimate indicates that the county has a very serious continuing problem that if not corrected will lead to a financial crisis; it could result in bankruptcy.”

The county is expected to lose approximately $2.2 million in revenue because property tax assessments this year increased by only 1.2%, the lowest tax rate increase in 12 years, officials said. The tax rate is adjusted for inflation and has a 2% cap.

“This is only the second time since Proposition 13 was passed (in 1978) that the assessed value has been less than 2%,” Assessor Glenn Gray said. The rate fell to 1% in 1983.

Mahon said most of the remaining $4.6 million loss comes from a decline in administrative fees charged to certain agencies, such as the Ventura County Medical Center, the Fire Department and libraries.

For instance, the county personnel office charges the county hospital a fee to handle its hiring and training. Because of previous staff cutbacks in personnel and other county departments, they now charge lower fees for services, Mahon said.

“Your expenditures have to equal your costs,” Mahon said. “The basic principle (of the state) is, ‘We’ll pay you back for whatever your costs are and nothing more.’ ”

In his report to the board, Mahon stressed that his budget projections are “on the optimistic side” and warned officials not to take them lightly.

“After several years, ‘budget fatigue’ can set in and the tendency is consciously or subconsciously to deny the magnitude and seriousness of the deficit problem,” he said in the report. “This must be avoided.”

Mahon noted, for example, that the county is in danger of losing another $4.5 million in Medi-Cal reimbursements that is included in both the current budget and next year’s budget.

Mahon said the threat of losing this money is very real because of an ongoing dispute between local governments and the federal Health Care Financing Agency.

The financing agency accepts claims for administrative costs involved in treating Medi-Cal patients. But the agency is now questioning the amount and size of claims it has received from municipalities, and is involved in a dispute with the state over disbursement of funds.

Mahon said that the county will just have to sit tight until the issue is resolved.

“It seems like when something goes bad, everything goes bad,” Mahon said. “I guess we’re just in one of those cycles.”

The Board of Supervisors will discuss Mahon’s report at its meeting on Tuesday.