Labor Costs Escape Budget Debate

Faced with a $36-million budget shortfall, Ventura County government managers are asking taxpayers to accept a host of painful cuts, from eliminating hot meals for homebound seniors to putting fewer police on patrol.

What’s not on the table are cuts in labor costs -- even though higher wages and benefits for county government’s 8,000 employees are a major reason the Hall of Administration is in financial straits.

More than half of the 2004-05 budget gap results from spiraling labor costs, according to county budget managers. Higher wages, healthcare and pension costs have boosted employee compensation $20 million higher than available revenue, managers say.

That bothers Don Facciano, executive director of the Ventura County Taxpayers Assn. Facciano believes the county could save jobs -- and the services they provide -- by instituting money-saving tactics regularly used in the private sector.

“In business, our biggest controllable expense is payroll,” said Facciano, a former Sears, Roebuck & Co. manager. “So if you’re going to do anything substantial, it’s going to have to come from payroll.”

To save money, county managers should propose such things as work furloughs and restrictions on vacation buy-back programs and even renegotiate promised raises, he said.

“Why not ask employees to take a one-week furlough or a couple of days without pay?” Facciano said. “That’s negotiable. If you add up a million here and a million there, all of a sudden it gets serious.”

Managers should also consider privatizing some services and take a close look at all contracts to see if more dollars can be shaved, Facciano said.

But county leaders say it’s not that easy. What works in the private sector is harder to achieve in government because of employee protections and the complexities of bureaucracy.

About 90% of county government employees are unionized and their contracts can’t be touched unless members agree to reopen them, said County Executive Officer Johnny Johnston.

“We have 10 unions, and there is no way to guarantee that if one union gives something back that they will save employees in their unit,” Johnston said. “They are reluctant to do it for the common good because everyone is scrapping for resources.”

So far, Johnston has not proposed cutting the wages of managers, either. But in a resolution that he intends to bring before the Board of Supervisors, they won’t be getting cost-of-living raises, the county chief said.

Ventura County’s budget hole was even bigger until Gov. Arnold Schwarzenegger unveiled his revised economic plan for the state last week. Under the plan, local governments would still accept $1.3 billion in cuts to help the state close its multibillion-dollar budget shortfall.

But the reductions would be spread evenly among counties, cities and special districts. That means that instead of losing $17 million in property taxes to the state, Ventura County would shoulder a $7-million reduction for each of the next two years.

County leaders say that even with the lower figure, layoffs and cuts in services are all but certain.

“Our cut is fairer,” said Steve Bennett, chairman of the Board of Supervisors. “But it is still very, very severe in terms of impact locally.”

Before last week’s revised state budget was released, Johnston estimated that the county would lose 1,000 positions, 400 of them currently unfilled. The number of layoffs probably would fall, Johnston said, but precise numbers would not be available until the details of Schwarzenegger’s revised plan were known.

Johnston said he raised the possibility of work furloughs and other contract givebacks with union leaders when the scope of next year’s budget shortfall began to emerge earlier this year. But they have been unwilling to give anything back unless they are guaranteed that the money saved would benefit only their members, he said.

Union leaders say they have good reason to be cautious. Rather than laying off the employees who provide the services, the county should trim from supervisory ranks, said Mark Pachowicz, executive director of Service Employees International Union, Local 998, the county’s largest labor group.

“My first question would be, what concessions are management making?” he said. “It’s incumbent on management to start at the top first. Managers can give back vacation days, go on work furlough. They can withstand a loss a lot better than a lot of our employees.”

Other labor leaders say they have learned to be skeptical about the county’s fiscal alarms.

“We’ve cut pay raises in the past, and both times the county found the money miraculously and then refused to give it back,” said Pat Buckley, president of the Ventura County Deputy Sheriffs’ Assn.

However, another union that represents guards and other jail employees recently presented a plan to the Board of Supervisors that it said would save the county $2 million a year by replacing deputies in the jail with civilian staff.

“The sheriff has the fiduciary responsibility to run his department as efficiently as possible,” said Lou Preiczer, spokesman for the correctional officers’ group. “This would enhance services because you would move deputies out of the jail and into patrol.”

Supervisors have agreed to look at the proposal, but Sheriff Bob Brooks has said his own review showed the reorganization would save little money over the long run because of higher benefit costs.

Although current wages are guaranteed, county leaders can be more tightfisted as contracts expire, Johnston said. He has already put out the word that all raises are off the table, he said. Sheriff’s deputies are already starting to negotiate their next contract.

The state’s fiscal problems are expected to be severe for at least another year, Johnston said. Meanwhile, employee compensation and other fixed costs are expected to again outstrip available revenue in Ventura County, he said.

“It’s a long-term problem that requires long-term solutions,” Johnston said.