Concerned about a deep decline in tax revenue, Orange County officials are trying to slash tens of millions of dollars in spending, cutbacks that could lead to layoffs and jeopardize public services such as health programs and child abuse prevention.
The move comes at a time when counties throughout Southern California are reeling from a plunge in sales and property tax revenue, and a nagging fear that the financial picture could worsen.
The squeeze on local government is expected to tighten further next year when the full impact of property tax adjustments hits.
As property values have slumped, homeowners have asked for their homes to be reassessed -- a process that will cut the government's property tax revenue.
Belt-tightening has already begun in Riverside and San Bernardino counties, which have both been particularly hard hit by the recession.
Orange County Executive Officer Thomas Mauk has directed all departments -- from the Social Services Agency to the county librarian -- to cut a combined $44 million in spending.
He said Friday that layoffs are "a distinct possibility."
"It will be painful. It's very drastic," said Bob Wilson, deputy director of the Orange County Health Care Agency, which provides a host of services, including flu shots for the elderly, healthcare for the poor and inspections of local restaurants.
Despite its above-average per capita income, Orange County has been hard hit by the economic downturn.
Median home prices in Orange County plunged 28% in July, unemployment increased to 5.7% and sales tax revenue designated for law enforcement is down 3% from 2007, Mauk said in a memorandum calling for the cutbacks.
"We have to do it because the revenues are going to be down not only this year but more dramatically next year," said county Supervisor Bill Campbell, who helps oversee the county's $6.6-billion budget.
"I'm thinking it may not even be a big enough cut."
Mauk has advised all agencies to stop hiring and to report to him by Friday about how they intend to cut spending.
Agency heads said they hope to reduce spending through attrition and by cutting overtime, travel and equipment purchases.
"This is as severe as I've ever seen it," Mauk said. "I'm sure we'll close clinics, youth camps and social services. I think there's no question that layoffs are a distinct possibility. We're at least, without layoffs, going to eliminate several hundred positions."
