The Placer County Board of Supervisors adopted a proposed 2011-12 budget Tuesday to ensure the county has a spending plan in place when the new fiscal year begins July 1. The proposed budget was adopted following a comprehensive series of budget workshops since February.
The proposed budget is for approximately $720 million, down 4.9 percent from the final 2010-11 budget. The county budget has dropped by 16.8 percent since the 2008-09 fiscal year, in large part because of the nation’s economic slowdown and state budget crisis.
Board Chairman Robert M. Weygandt emphasized that Placer County is faring better than many counties and cities throughout California, thanking the county budget team for its efforts.
He noted that the decline of the construction industry has had a major impact on Placer County, one of the state’s fastest growing counties over the last decade. “And yet, overall, the county is very stable and healthy financially,” he said.
The county budget team expects property tax revenue, the county’s largest revenue source, to drop by $4.8 million next fiscal year. Total per-capita county revenue has declined 9 percent in the last three years and 10 percent since the passage of Proposition 13 in 1978. Per-capita expenditures have also declined and are at the Proposition 13 levels.
The size of the county workforce will be 13.5 percent smaller next fiscal year than in 2007-08 largely as a result of a hiring freeze approved by the board in 2007.
The hiring freeze has helped Placer County avoid the large-scale layoffs experienced by many counties and cities. Over the last three years, Placer County has laid off 17 employees due to reduced workloads or insufficient state funding, representing 0.6 percent of the workforce. Most were land-development staff whose workloads dropped significantly in response to the construction industry slowdown.
A small number of layoffs may be necessary during the 2011-12 fiscal year due to reduced workloads and funding reductions.
The proposed budget will serve as an interim spending plan when the new fiscal year gets under way July 1. Adopting the proposed budget completes the first phase of the county’s two-phase budget-approval process.
The two-phase approach allows the county to adopt a final budget after final estimates of available funding have been determined. The board plans to hold budget workshops during August and is tentatively scheduled to adopt a final budget on Sept. 13. By then, the county hopes to have a clear picture of how it will be impacted by the state budget.
Placer County still could face substantial revenue shortfalls and service disruptions if the state reduces funding for mandated county programs and shifts responsibility for some state programs to counties without accompanying funding. The budget team estimates the county has from $30 million to $60 million at risk in the state’s budget battles.
Placer County still does not know whether its Redevelopment Agency will survive the state budget battles. Gov. Jerry Brown has proposed eliminating local redevelopment agencies throughout the state.
In a report to the board Tuesday, Finance and Budget Operations Manager Graham Knaus said the proposed budget maintains critical services to county residents, aligns service demands with available resources, and is balanced without reliance on general fund reserves. In addition, the proposed budget preserves additional mitigation options to address state budget impacts that will be presented to the board during the August workshops.
Knaus recounted some of the actions the board has taken the last few years to reduce costs in addition to the hiring freeze. They include:
· Providing early and continued board direction to align expenditures with available resources;
· Directing staff to explore service innovations that result in more efficient and effective service delivery;
· Having employees pay larger shares of their pension and health insurance costs;
· Creating a two-tier retirement system that will scale back benefits to new employees, but help ensure that benefit costs are sustainable in the future; and
· Redirecting some funding to preserve the county’s core operations.