Los Angeles County officials on Monday unveiled a $22.8-billion budget for the coming fiscal year that cuts $415 million from the current budget, taps reserves to offset dwindling tax revenue and eliminates 1,684 positions that are mostly vacant.
Although county officials want to avoid layoffs, they warned that additional cuts probably will be needed this year depending on the economy and the state budget. The budget also fails to account for a $257-million shortfall in funding for health services, which health department officials are expected to address soon.
"Unlike previous years, this budget has to be very fluid," said William T Fujioka, the county's chief executive. Fujioka said he hoped that new contracts with county workers will be negotiated in the spirit shown by the public safety unions earlier this year, which agreed to no salary increase for a one-year contract extension. He said the county is not asking for concessions in current contracts.
The proposed county budget covers an expected $300.4-million budget gap by trimming $107.2 million from departments and drawing $115.5 million from reserves and $77.7 million from the federal stimulus package.
The budget accounts for a 1% drop in property assessments, but Fujioka said recent estimates show that is expected to more than triple to 3.3% during the coming fiscal year as more homeowners appeal their assessments. As a result, the county will probably have to adjust the budget in June to account for an additional $88.3 million in lost tax revenue.
County revenues are down across the board, including deed transfer taxes (down 31.3%), sales taxes (down about 6%) and interest earnings (down 56.8%). The proposed budget does not provide for that shortfall or $103 million in state budget cuts expected next fiscal year.
The largest proposed staffing cuts are in social services, health services, public health, parks and recreation and child support services.
Service Employees International Union Local 721, which represents about 55,000 county workers -- about half the county workforce -- is set to negotiate new contracts in July. Spokeswoman Elizabeth Brennan acknowledged the strain the county is under but said SEIU workers have been stretched thin by increased demand for services.
Sheriff Lee Baca, who had threatened to close a jail in the face of what he said was a projected $72-million budget gap, said Monday that he accepted the $31.6 million in cuts called for under the proposed budget.
"It shows a lot of fiscal prudence," he said of the budget, which provides $2.5 billion for his department, about $7.8 million less than the current fiscal year.
Fujioka is scheduled to present supervisors with the budget today, followed by public hearings starting May 13 and supervisors' deliberations beginning June 22.