O.C. prepares for cuts in new budget

Another bleak year of government cuts is in store for Orange County, officials said Monday as they released a proposed budget that could eliminate hundreds of jobs and dip into reserves to close a projected $85-million shortfall.

“This is our most difficult budget we’ve seen in this recession,” Robert Franz, the county’s chief financial officer, said Monday in a briefing with reporters on the $5.4-billion budget.

Although some tax revenue, including vehicle sales tax and licensing fees, has started to inch up with the rebounding economy, property tax — which accounts for about 80% of county revenue — has continued to decline, offsetting those gains.

“We have not yet seen any significant revenue impacts from economic recovery,” Franz said.

The budget plan by the county executive office places 175 full-time county jobs at risk, most of them in the district attorney’s and public defender’s offices.

Also in play are more than 300 positions that depend on negotiations underway between the Sheriff’s Department and U.S. Immigration and Customs Enforcement to house immigration detainees at the Theo Lacy Facility. The proposed budget assumes $8 million in revenue from that agreement, even though no contract has been signed.

The budget plan, which will be taken up by the Board of Supervisors on June 15, also proposes drawing $36 million from the county’s reserves and other one-time sources.

Officials said the difficulty of this year’s cuts have been compounded by several years of belt-tightening and even more severe fiscal woes in the state capital. Orange County has cut about 15% of its non-public safety budget and eliminated more than 1,000 jobs since 2008.

With state-mandated welfare and health services on the chopping block in Sacramento, there will probably be additional cuts as those decisions trickle down to the county level.

Funding for a few county programs is expected to rise, however, due to increased demand during the recession.

The county Health Care Agency, for instance, is being allocated a $2-million increase as more people enroll in the Medical Services Initiative, a safety net program for indigent adults.

tony.barboza@latimes.com