Financial headwinds are on the horizon for Riverside County, making it necessary for most agencies to prepare to absorb budget cuts in the coming fiscal year, according to a report that the Board of Supervisors will review Tuesday.
Orr said general government departments will have to manage a 6.5 percent chop in general fund allocations, in order to maintain discretionary reserves at the board-mandated level of $150 million going into 2017-18.
Too many variables threaten to overwhelm the county’s revenue sustainability, making fiscal discipline a must, according to the budget report.
Executive Office staff, as has been the case since the midyear report in February, sounded the alarm about the likelihood that In-Home Supportive Services programs will be the sole obligation of counties throughout California, as the governor and Legislature look to spare the state from ballooning IHSS expenses.
IHSS is a Medi-Cal program that provides direct assistance to low-income seniors and the disabled who are living independently, including meal preparation, bathing, medication dispensation and other on-site care.
If the program is shifted entirely to counties, Riverside County could be on the hook for more than $43 million in additional expenses in 2017-18 — and $165 million in higher costs by 2023, according to the Executive Office.
The budget report also noted that sales tax revenue is going flat, and “property tax revenues are still trending lower than expected,” although the assessment roll is projected to grow about 5 percent in the next fiscal year.
“It is worth remembering the county’s constrained discretionary revenues may be vulnerable to cyclic recessionary forces,” Orr wrote. “Due to the need to maintain a minimum level of reserves, for the foreseeable future, any expansion of discretionary spending in one area must be offset by cost saving in another.”
Multiple agencies are projecting deficits going into 2017-18, including the Riverside County Department of Animal Services, District Attorney’s Office, Fire and Sheriff’s departments and the Office of the Public Defender.
The numbers were fluid and too early to nail down in a few instances, though the board has already begun the process of applying corrective measures on the fire department’s ledger.
Fire Chief John Hawkins came to the board with a projected $12 million deficit in March, and several proposals were embraced that will shave the deficit by half, mainly by scaling down operations at a firehouse and dissolving a hazardous materials unit.
Labor expenses are the biggest cost drivers for almost every agency. The D.A.’s office will end the current fiscal year about $5 million over budget, while the public defender’s office will not be able to pare down the $2.4 million in red ink with which it started the current fiscal year, according to the report.
The Department of Animal Services, due primarily to decreasing contract revenue, is facing a $1 million shortfall heading into 2017-18, while the Office of the Registrar of Voters is seeking an additional $5 million to cover an anticipated gap associated with the 2018 election cycle.
It remains to be seen whether — or how — the board will address the agencies’ needs to keep them whole.
— City News Service