Current county revenues growing, future growth slowing
Riverside County CEO Jeff Van Wagenen delivered good news during his
presentation of the midyear review of Riverside County’s fiscal year
(FY) 2023-24 budget last week.

PHOTO COURTESY OF RC
During his budget report at the Feb. 27 board of supervisors meeting, he
reported that revenues for the current FY are expected to be about $60
million greater than when the budget was adopted last year.
Last June, the board adopted a FY 2023-24 budget that anticipated $1.143
billion in revenue and now Van Wagenen’s financial staff is projecting
total revenues to be about $1.2 billion.
The two largest increases are property tax revenue and interest on the
county’s cash. Also, motor vehicle taxes and former Redevelopment Agency
Residual Assets contributed about $15 million more.
The Proposition 172 sales tax revenue for public safety is “not as rosy
as the others,” Wagenen alerted the board. Fortunately, reserves were
already adopted during the budget proceedings in case a decline were to
occur. Next year and future budgets, he believes the Prop 172 funding
will recover slightly.
The county’s contingency fund, which was $20 million at the beginning of
this FY, remains at $15.7 million.
Consequently, reserves at the end of the FY are now also projected to
increase from $555 million in the adopted budget to $677 million in the
midyear projections.
“This is a significant increase. Much better than what we had certainly,
any time in the past 12 to 15 years,” he shared. “We’re still shy of the
government finance officer’s target for best practices of two months of
operating expenses. We’re closer now.”
Addressing future years, Van Wagenen warned that revenues are now
expected to flatten in future FYs.
“We’re not seeing a decline or significant decline in revenues,” he told
the board. “Bad times have not arrived and they may never arrive, but we
have to prepare. The significant growth we’ve seen over the past three
years is absolutely slowing.”
Although four months remain in this FY, county agencies already are
beginning to make plans for FY 2024-25.
Van Wagenen advised the board of potential pressures on the next few
budgets. He mentioned six specifically, including the state deficit,
which is growing, and the ability of the federal government to
appropriate funds.
More specifically, he noted that the county’s labor costs are going to
increase. “That’s salaries, that’s benefits and that’s pension costs,”
he stated.
The county has recently agreed to several new employee contracts — the
Deputy District Attorneys Association and the Service Employees
International Union. An agreement with the Laborers’ International Union
of North America is being negotiated. Next year, the county will meet
with the Riverside County Sheriff’s Association, Van Wagenen said.
There will be insurance premium increases as well as general cost growth
such as for gasoline.
“Because of the growth of our communities, there’s a need for new
programs and projects,” he added. County departments have already
suggested more than 160 new initiatives and 175 capital improvement
projects for FY 2024-25.
“The is significant pressure coming to bear on departments to continue
to provide services and meet the needs of our communities,” he
concluded.
The board’s budget hearings for the FY 2024-25 are planned for June 10
and 11, and the budget is expected to be adopted at the June 25 meeting.