SANTA ANA — The Orange County government's proposed budget for the next fiscal year calls for a third straight year of painful cuts as the county's revenue sources are expected to continue their slump due to the economic downturn.
The fiscal 2010-11 budget proposal, released Monday, draws about $36 million from the reserve fund and other one-time funding sources, but still leaves the county about $49 million short of what would be needed to maintain the same level of services as this year.
The proposal calls for county departments to shrink their budgets by 5% during the next fiscal year, which begins July 1. That would mean that since 2008-09, all non-public safety departments will have cut their budgets by 15%. Public safety agencies such as the Sheriff's Department, district attorney and Probation Department have cut closer to 10%.
Bob Franz, the county's chief financial officer, said the budget cuts are necessary because the improving economy has not yet translated into more revenues for the county.
"This is probably our most difficult budget we've seen during this recession," he said. "Still coming out of the recession, we have not yet seen any significant revenue impacts from the economic recovery."
Overall, the county's budget for next year is proposed to be $5.4 billion, about the same as the current year. But the county's discretionary budget, which pays for many public safety and community service programs, will shrink from $701 million this year to $688 million in 2010-11.
The Board of Supervisors is scheduled to approve the budget June 29. Before then, the county will hold a public budget workshop May 28 and the board will hold hearings June 15 and 16.
County budget officials blame the proposed cuts on the continuing decline of property tax revenues, which provide about three-quarters of the county's general funds. Though revenues from sales tax and vehicle license fees are rising again, property tax revenues are projected to decline another 1.3% next year.
"Property tax responds slower to what's going on in the economy," Franz said, "(and) that's the major factor affecting our revenues."
Proposed for the chopping block are 39 district attorney employees, 29 employees of the public defender's office and up to 311 sheriff's department employees, though county officials hope a proposal to host federal immigration detainees in county jails will save many of the sheriff's department positions. The proposal also calls for cuts to many community services, including health-care programs, child support services and funding for public libraries.
A wild card in the budget proposal is the Sheriff's Department, which could lose up to 311 positions if things don't go right. The department's budget was originally proposed to be cut by $54 million, but the county executive's office has recommended that $17 million of that be restored. Still, that leaves the department with a reduction of about $37 million.
The sheriff's department also is depending on winning a federal contract to house Immigration and Customs Enforcement detainees in county jails. The contract, expected to be awarded in the next couple months, could reap the department about $8 million, which would allow it to save many of the 311 positions that could be cut.
The county allowed the department to delay a decision on cutting staff until the contract is awarded, but if it falls through, all bets are off.
"That is one of the areas that we do have some concerns about with the sheriff's budget because we have revenue built into their budget that assumes that the ICE contract will be in place next year," said Frank Kim, the county's budget director.
Some Sheriff's Department staff cuts likely will be necessary even if the federal contract comes through, he said.
The reductions proposed for next year's budget are particularly difficult for the county to absorb because departments have already taken the easiest cost-cutting measures, such as delaying equipment purchases and leaving unfilled positions vacant. There's not much fat left to trim.
"All those kinds of things were cut first," Kim said. "They were relatively easy compared to the kind of reductions we're having to make today. … It will be harder."