San Diego County is facing a $78 million budget deficit that is expected to persist in coming years and could force cuts in public safety and programs for low-income families.
The county Board of Supervisors received an update yesterday that showed a bleak picture for sales and property tax revenues and state funding, which makes up a large chunk of the county's $5.2 billion budget.
Most county operations won't be affected this year as the county taps into savings to shore up a loss of $47 million in taxes. But health and social services provided by the county will be affected because they rely heavily on state funding.
Those programs, provided by the Health and Human Services Agency, face a loss of at least $31 million this year.
Agency officials said they may have to offer fewer services delivered by fewer employees at a time when the declining economy has forced more and more people to seek public assistance.
The financial problems could deepen this year if Sacramento decides to pass along part of the state's $28 billion budget deficit to local governments by withholding money as it has in the past.
The financial woes date to 2003, when the county was forced to make dramatic social service cuts because of a drop-off in state funding. The agency will likely bear the brunt of the impact this time as well because the county often passes along state cuts directly on to its state-funded programs.
Walt Ekard, the county's chief administrative officer, said the county is being hit by a decline in tax revenue and state funding cuts. But he said the county is better positioned than most public agencies.
“Collectively we have fiscal concerns the likes of which we've not seen in many years,” Ekard said. “Our ability to manage our finances while continuing to provide core services to the public will be tested.”
County leaders said the financial impact can be dealt with for the current fiscal year, which began July 1, by tapping into roughly $90 million in leftover revenue from last year. Vacant positions will go unfilled and some programs and services may be scaled back.
Don Steuer, the county's chief financial officer, said the real problem arises next year when a $74 million revenue shortfall is expected. There won't be any leftover money to make up that deficit so programs are likely to be cut and employees could be laid off.
No decisions were made yesterday. Board of Supervisors Chairman Greg Cox said tough decisions would need to be made should the outlook continue to worsen.
Supervisor Bill Horn criticized the state for pushing its budget problems onto the county and forcing a reduction in services.
“We're in for some challenges that are going to last for a few years,” he said. “You're not going to able to see growth of programs. In fact, we're going to be lucky if we can maintain what we have.”
He added, “We will do our best to keep the ship afloat. At the same time, you have to understand that these forces are coming from the outside and there's just not much we can do about it except try to manage it the best we can.”
One area that could be hit hard is public safety, including the Sheriff's Department, the District Attorney's Office and the Probation Department. Those departments rely on a general sales tax for part of their budgets and the county's financial experts predict a shortfall of $30 million next year.
Craig Gustafson: (619) 293-1399; craig.gustafson@uniontrib.com
