The current fiscal year budget (ending June 30) is nearly complete and County Executive Jay Orr is confident no deficit will be waiting at the close. However, the 2013-14 budget, which will start on July 1, will encounter some significant problems before it can be balanced without dipping into the county’s reserves.
Orr submitted the “Third Quarter Budget Report” to the Board of Supervisors this week and extolled the efforts of the district attorney, sheriff and fire chief to reduce and eliminate the projected budget deficits in their departments this year.
Although the county’s consultants are optimistic about revenue growth next year, the expected labor costs are more than $60 million. In addition, the county’s Regional Medical Center’s deficit is projected at $50 million as well as having a substantial cash flow problem.
Public safety costs will continue to be major budget issues, despite the results department heads have achieved this year. Last month, the Board voted public safety its top priority and set a goal of increasing the number of sheriff’s deputies to 1.2 per 1,000 residents in the unincorporated areas. The requirements to carry out the state’s shift of prisoners to county responsibility also place significant demands on the 2013-14 budget. Another issue will be funding the county’s new public safety communication system, which is expected to begin operations next year.
“That leaves the county with major obstacles to overcome, as discretionary revenues remain uncertain while payroll costs are set to increase and the county outlines a course to manage mandates for affordable health care,” Orr reported to the board.
Compounding the challenge to balance next year’s budget is the need to begin addressing capital equipment and renovations, which have been deferred for several years. Another hurdle is the need for additional jail space as well as preparing to staff and run the future jail expansion that should be operational in 2015.
Continuing with his tepid report, Orr admonished the board, “Even with the revenue increases forecast, balancing the budget will continue to require taking the long view with prudence and restraint.”
He then warned that layoffs or service reductions may be a necessary result of balancing the 2013-14 county budget, “essential to laying a sound foundation for the county’s future.”
However, Orr is optimistic property tax revenues, which are nearly half the county’s discretionary funding, will begin to increase next year. Early indications include growth in new construction activity. Permit requests for new construction — home and commercial — are up 26 percent compared to this point in 2012.