Proposed County Budget Shows Signs of Recovery

Expressing optimism about Los Angeles County’s fiscal future, Chief Administrative Officer David Janssen presented a proposed annual budget Monday that for the first time since a 1995 brush with bankruptcy would not require cuts in services and jobs to close a projected deficit.

The $13.2-billion annual spending blueprint--a whopping 5.3% larger than last year’s annual spending plan--actually restores a few critical services for the first time in years, thanks to an influx in state and federal funds. It even provides a meager $19 million for long-neglected improvements to county buildings, computer systems and vehicles and for expanded services to the 1 million people living in the unincorporated areas of the nation’s largest county.

But what is so remarkable about the “good-news” spending plan, Janssen’s bosses on the Board of Supervisors said Monday, is that it comes so soon after the fiscal meltdown that threatened the county’s very solvency.

A projected $1-billion deficit in 1995 led Janssen’s predecessor, Sally Reed, to call for the closing of the mammoth County-USC Medical Center and eventually to eliminate thousands of jobs and scores of important government programs.

Overall, the massive budget brings few surprises for the San Fernando, Santa Clarita and Antelope valleys, where funding for most programs is mandated by federal and state law.

A majority of the county’s five elected supervisors said that they will approve Janssen’s plan in the coming weeks with few if any changes. The transformation of the county’s financial picture, some said, is nothing short of a miracle.

“This budget is a remarkable development,” said Supervisor Zev Yaroslavsky. “If you had told me three years ago that we would be in the black . . . I would have said you needed your head examined. As painful as it has been, it is a remarkable story. We have come through the most precarious time in L.A. County’s financial history.”

At a morning news conference, Janssen attributed the turnaround to a combination of hard choices made by the supervisors themselves, to more money from Sacramento and Washington--thanks in part to a far-better organized county lobbying campaign--and even to cooperation and concessions from the county’s powerful labor unions.

“It took all of those parties working together to be successful, and, of course, the economy helped,” Janssen said.

The county’s top fiscal officer warned, however, that the supervisors would be making a major mistake if they use their newfound financial stability as an excuse to fund pet programs and restore too many services and jobs in the once-bloated government bureaucracy.

What’s more, Janssen admonished, the supervisors cannot put off several tough decisions required to address significant fiscal uncertainties that still lie ahead.

By the year 2001, for instance, the county will no longer have the option of taking as much as $300 million a year in excess pension fund earnings to patch over a gap between what the county spends each year and what it takes in from taxes and from state and federal government transfers.

As a result, Janssen has built into his financial blueprint an escalating series of annual county contributions to that pension fund, which are designed to slowly wean the supervisors off their reliance on the money.

Including in this year’s proposed contribution is about $30 million that the county has to pay to begin erasing a $1.2-billion unanticipated pension fund liability that came to light earlier this month.

“It is something we can’t walk away from,” Supervisor Don Knabe said of the liability. “We have to take responsibility for it.”

In two years, the county also will lose hundreds of millions in annual federal health-care dollars that President Clinton promised in the heat of his reelection campaign. As it is, that system still is hemorrhaging money, and the supervisors and the Health Services Department must find a way to downsize it by more than $318 million or find additional funds to pay for it, Janssen said.

And there is a third financial liability that looms darkly in the county’s future: more than $200 million in much-needed maintenance and capital improvements to government buildings that have been deferred year after year, as the supervisors struggled with more immediate concerns.

Many of the county’s buildings have been neglected for so long that some have become safety hazards. Janssen has proposed spending $10 million on capital improvements in the upcoming fiscal year, which begins July 1. But that, he conceded, is only “a drop in the bucket” given the 57 million square feet of county office space.

Janssen also proposed spending $3 million to replace aging county vehicles, many of which also are in dangerous states of disrepair.

Knabe said he will vote to support Janssen’s calls for continued fiscal restraint, as did Yaroslavsky and Supervisor Gloria Molina.

The proposed spending plan, Knabe said, “is better than having a budget where you have to react to one crisis after another. But I think we have to be prudent and stay on course, and not spend money willy-nilly.”

The budget does, however, include a list of new programs that are designed to at least in part restore some of the cuts made during the summer of 1995 and in subsequent years.

It also provides an increase of 2,500 employees, although Janssen said Monday that thanks to an improved economy, it does not not rely on any of the same precarious assumptions that got the supervisors into so much fiscal hot water in recent years, such as voter approval of special taxes and state funding for welfare and probation programs.

Hundreds of workers will be hired to help the Department of Public Social Services overhaul its welfare programs. And more than $10 million will be spent on mental health programs for troubled children in the county’s care. Another $24 million will go toward improved mental health services in the jails as part of an agreement with the U.S. Justice Department.

Another $2.9 million would be used to hire 82 deputy sheriffs to continue a popular community policing program in the unincorporated areas. And 32 probation officers will be added to ease caseloads and make sure ex-convicts are obeying the conditions of their parole.

The budget has meant a slight increase in the budgets for most departments, but clinics and hospitals serving the San Fernando Valley will see their budgets reduced by nearly $14 million.

The reductions are part of an overall effort to retool the county’s sagging health care system to offset a projected $318-million deficit when a federal financial bailout expires in two years.

At Olive View/UCLA Medical Center, however, the budget for next year will increase by $18.9 million to $249 million, although the hospital will lose five patient beds. Spending on High Desert Hospital in the Antelope Valley will increase by $11.2 million over 1996-97, to about $60 million.

Besides the hospitals, the county provides a variety of other health care services, including clinics and health education and AIDS programs.

A modest increase in the budget for the regional planning department could mean two additional zoning officers for the unincorporated parts of the region, and county libraries in those areas will likely benefit from a $400,000 increase in the budget for purchasing books.

Parks in unincorporated areas will also receive a boost in the new budget, which includes a modest increase meant to restore after-school programs that were cut during the fiscal crisis that has plagued the county over the past several years.

Janssen said he is recommending the increases in service to the unincorporated areas, which include parts of the High Desert, the West Valley and Topanga Canyon, because the county is the only municipal government available to people who don’t live in incorporated cities.

The 1 million who live in unincorporated areas must fight for attention and funds with the 8.3 million who populate the county’s 88 cities, Janssen said.

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Staff Writer Sharon Bernstein contributed to this story.