O.C.’s Carved-Up Budget Is Harbinger of Counties’ Woes

In the late 1990s, Orange County’s finances were back on solid ground. The harsh budget cuts imposed after the county’s 1994 bankruptcy were over. There was enough money to subsidize health care, social service and law enforcement needs that were being shortchanged by the state.

County officials created a protocol office to welcome visiting dignitaries and supported the arts. They even spent money luring filmmakers.

But those days are over.

Last week the cash-strapped Board of Supervisors adopted $102 million in spending cuts for the coming fiscal year, which begins July 1.

Among other service cuts, that means the loss of hundreds of affordable-housing units; decreased health care for teens, pregnant women and drug abusers; increased institutionalization of foster children; and delays in assessing child-abuse cases.

“These cuts will affect individuals of all ages, from newborns to older adults,” said Pat Markley, spokeswoman for the county Health Care Agency. “The cuts will be deep. And in many important areas, we will not be able to provide services for all those in need.”

And that doesn’t include the fallout of the state’s projected $35-billion budget shortfall, which local officials predict will cost the county tens of millions of dollars more.

“The budget crisis that we’re experiencing right now is the biggest obstacle in our financial planning since the Orange County bankruptcy,” said Gary Burton, the county’s chief financial officer. “There is a chance, if the state is not careful, they could bankrupt the county. And [we] would be one of the first ones that would fall.”

Counties up and down the state face similar squeezes, beset by increased demand for services, higher pension costs and decreased revenue, said Jean Hurst, a legislative analyst with the California State Assn. of Counties. Orange County faces unique challenges because it still owes $881 million in bankruptcy debt, she noted.

The severity of Los Angeles County’s budget woes won’t be detailed until April, but Chief Administrative Officer David E. Janssen said officials are braced for “some pretty serious local-revenue problems as well ... more than Orange County.”

Orange County offers a preview of what other California counties face because it has required a five-year strategic plan, intended to balance county finances for five years, ever since the bankruptcy.

The five-year plan, adopted Tuesday by the board, is a blueprint to draw up a budget well in excess of $4 billion, which will be presented to the board in May.

Tens of millions of dollars that were cut will have no impact on residents. For example, instead of spending $29 million to build a new South County courthouse, the construction will be financed over many years.

But other reductions, particularly cuts in health care, social services and affordable housing, will be painful, according to department heads.

Markley said the county Health Care Agency expects more than $20 million in cuts next year, reducing funding for inpatient treatment for the mentally ill; disease-control services to combat health threats such as tuberculosis; clinical care for sick and disabled children, pregnant women and drug abusers; preventive health care for seniors; behavioral services for adolescents; mental and physical health care for County Jail inmates; and public-health labs.

Some of the cuts may be shifted to areas of less public impact but, nonetheless, “these cuts are going to hurt,” Markley said.

The Social Services Agency will lose $2.5 million next year in county funds, and potentially millions more in state money.

The county’s fiscal crisis will force one division, Children and Family Services, into its own “crisis management” mode. Child-abuse assessment will be delayed. Eligibility determination, outreach and enrollment for Medi-Cal will be reduced, likely prompting the indigent to seek expensive emergency-room treatment, according to the agency. Assessment of potential foster homes will be delayed, meaning more foster children will be institutionalized.

The Housing and Community Development Department will get none of the $8.8 million in county funds it was counting on to build nearly 600 low-income housing units next year. The department will still receive up to $4 million in federal and redevelopment funds for affordable housing, which it will use to build as many as 300 units.

The criminal justice system stands to lose nearly $8 million, primarily affecting the Sheriff’s Department, but also affecting the district attorney’s and public defender’s offices and the Probation Department.

Sheriff Michael S. Carona has said that the department has been able to withstand cuts without reducing public safety, but warned it was getting more difficult because of a heavier workload created by new antiterrorism efforts.

Dist. Atty. Tony Rackauckas said he is confident that county officials will not jeopardize residents’ safety.

“I know the board’s highest priority is to protect the public from crime, and so I’m confident that once everything is settled, that they will have funded the DA’s office and the Sheriff’s Department sufficiently so we can perform our mission,” he said.

The county also sharply cut funding for a number of discretionary programs that support hate-crime victims, local businesses, arts and other programs not required by law.

All county funding was eliminated to Arts Orange County, an umbrella group for arts organizations that provides grants, holds workshops, publishes a bimonthly newsletter and promotes arts education in schools.

The county also eliminated the Office of Protocol, which recently greeted the Pakistani ambassador to the United States along with other foreign dignitaries.

The Orange County Business Council, which promotes workforce and economic development, will lose 75% of its county funding over the next three years.

The Tourism Council and the Film Commission -- which recently wooed director Steven Spielberg to shoot a scene of “Catch Me If You Can” in Orange County -- will also lose three-quarters of their county money.

The Human Relations Commission was proposed to be eliminated within four years, but the board voted instead to cut its funding by 75% over three years to leave a small presence.

Executive Director Rusty Kennedy said this cut could hamper the commission’s ability to teach students about inter- ethnic relations, run community mediation clinics, educate police officers about ethnic communities and offer support services.

With the threat of terrorism, increasing tensions with Iraq and a weak economy, he said, the commission’s programs are especially crucial right now.

Board Chairman Tom Wilson, who took the gavel in January, said that the financial difficulties are threatening the county’s ability to do one of its most crucial jobs: caring for the most vulnerable members of society.

“We’ve always been known as the safety net, and it sounds to me after [Tuesday] that we have quite a few holes in the safety net,” Wilson said.

“Those have to be patched up,” he said. “We can’t let people fall through it and get lost in the system or become desperate.”

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Cutbacks by counties

Counties throughout California are planning significant budget cuts for the coming fiscal year. Some of the cutbacks in a sampling of counties:

Fresno: Jobs are being eliminated in the district attorney’s office and human services department; 45 unfilled positions in the child support services department will remain vacant.

Humboldt: In the health and human services department, 200 vacancies have been frozen.

Monterey: All county departments have been asked to plan for 25% budget reductions.

Sacramento: Plans are underway to close three primary care health clinics, eliminate 40 full-time jobs and reduce treatment to 60,000 uninsured patients.

San Bernardino: Department heads have been asked to plan for 30% budget cutbacks across the board.

San Francisco: The health commission has recommended $34 million in cuts to the public health system, affecting treatment for drug addicts, the mentally ill and the poor.

Santa Clara: Hundreds of county employees are expected to lose their jobs, including layoffs of 81 of the Sheriff’s Department’s 550 deputies.

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Source: California State Assn. of Counties