Spending Plan in Limbo Until Lawmakers Return From Vacation : Finances: Up to $300 million of county budget package depends on revenue that may never materialize. State legislators’ break leaves key questions unanswered.


Only hours after adopting their annual budget using funds they didn’t have, Los Angeles County supervisors were back in near-panic mode Wednesday, saying they must now search for a way to preserve the remnants of the county’s health care network and other slashed services.

At the end of Tuesday’s fast and furious budget deliberations, the supervisors had praised themselves and their staffs for coming up with ingenious funding sources to avert the immediate closure of county hospitals, as well as parks, libraries, courtrooms and jails.

But by the next morning, some of that financing was unraveling, especially $75 million in annual transit funds that the supervisors hoped to raid over the next five years to help keep county hospitals open.

The fate of tens of millions of other dollars--for probation officers, tax assessors and beaches--also remained in limbo. Uncertainty will reign until Aug. 21, when state lawmakers--who must approve the additional funds--return from vacation.


As a result, there are still no clear and permanent winners and losers in the county’s bare-bones budget. There are only those departments that have been decimated, and those with the budget ax hanging over them.

As much as $300 million of the county’s estimated $11.5-billion budget is based on phantom revenue that could never materialize. That means thousands of county employees and the residents they serve will be holding their breath for weeks, if not months.

By late Wednesday, county financial experts were still trying to figure out exactly how much the supervisors approved in their spending plan Tuesday, and how much of that money is real.

“Everything is sort of up in the air,” said Supervisor Deane Dana. “I’m sure we have more work to do. It’s all hanging loose.”


Dana said he was stunned that state lawmakers, who passed their own budget early Wednesday but left many decisions for when they reconvene, are leaving the county in so long a lurch. “Until they do,” he said, “there is nothing we can do.”

Of particular concern Wednesday was the county’s fragile health care network. The supervisors closed a $655-million Health Services Department budget deficit by relying on as much as $200 million in uncommitted federal money and $75 million a year in money that was to be shifted from the Metropolitan Transportation Authority to county health programs. However, Gov. Pete Wilson on Wednesday vetoed all but $50 million of the transit money transfer (for one year only), alarming county officials who said they had been told he would lend his support.

“The failure to get that [expected] money, to replenish it in some form, is going to signal the death knell of the county health system as we know it,” said Supervisor Zev Yaroslavsky. “I think you can kiss the county health system goodby. [County] hospitals will be on the block as well.”

Michael J. Henry, the county’s human resources director, said that if the state and federal assistance does not come through, “we’re back at square one. The dust has not settled, and quite frankly it will not settle for quite some time.”

Department heads whose funding restorations came directly from the county were breathing sighs of relief Wednesday. They included Dist. Atty. Gil Garcetti, who will only take a 5% cut in his budget, and Sheriff Sherman Block, who will suffer a 7% decrease, compared to a 20% reduction first proposed for all departments last month by Chief Administrative Officer Sally Reed.

Other officials were forced to put in motion layoffs, scarcely cheered by the fact that they were less drastic than originally anticipated. Among them: 63 employees in the assessor’s office, six in beaches and harbors, 15 in parks and recreation, 46 in the Internal Services Department, five in regional planning and one in consumer affairs, Henry said.


The Probation Department received a $17.1-million windfall Tuesday, but may still have to lay off 400 or more employees and close probation camps for juvenile offenders, depending on whether state lawmakers vote to give it another $17 million when the Legislature reconvenes.


That money already has been included in the county budget. So has $13.5 million in state loans for the assessor’s office, and as much as $45 million for the huge Department of Public Social Services, which administers welfare and food stamp programs. But that money also requires state approval, Henry said, and 1,800 social services employees’ jobs hang in the balance.

And then there is the budget’s Christmas week employee furlough, whose savings are part of the funding package even though they must still be approved by county unions, which have vociferously opposed such a plan in the past.

Under the plan, “nonessential” county workers would not come to work that week, although the corresponding reduction in pay would be spread throughout the year. Law enforcement, hospital and other essential employees would remain on the job during the holiday week and take their mandatory days off at another time.

Union leaders have been hesitant to say anything other than that they will negotiate with the county over the furloughs, probably as part of upcoming contract negotiations. While the budget says the furloughs would save $28 million, Reed believes the savings would be far less.

Much of the budget crafted Tuesday followed behind-the-scenes discussions in which the supervisors and their chief deputies created a pool of $94.7 million, and then began the process of parceling it out to the various departments.

One by one, motions on where to put the money were scribbled on paper, brought before the board and then approved--usually without question--before being added up on a large white tote board. Behind the supervisors, top aides hastily added up figures on an old calculator, making sure they didn’t overspend the money.

In the end, the supervisors were left with a surplus of about $38 million, which they said they would set aside in the event some of the speculative funding didn’t come through.



After approving $1.5 million in additional funds for the public defender’s office, Supervisor Gloria Molina had to bring the motion back for another vote, saying she actually meant for the department to get $8 million. That too was approved with little if any discussion, as were Supervisor Michael Antonovich’s law and order motions, including $12.8 million more for Superior Court operations and $6.1 million for Municipal Courts.

The supervisors also dispensed another $2 million for the coroner’s office, $5 million to keep parks open, $4 million for libraries and $8 million for the assessor’s office so that it would be eligible for $13 million in matching state funding.