Pensions, health costs and state inaction cloud Yolo County budget
Published: Monday, Apr. 25, 2011 - 12:00 am | Page 1B
In Yolo County, budget officials are gearing for the next major test of balancing spending with available revenues – a task made harder by increasing health care and pension costs.
In recent years, Yolo – like other counties in the region – was hit hard by declines in both property tax and sales tax revenues.
Now, just as sources of tax revenue are starting to stabilize, the county faces yet another tough budget challenge because of a rapid rise in pension and health care costs for employees and retirees, Yolo County Administrator Patrick Blacklock said.
The tally: The county will pay $4.8 million more to the California Public Employees' Retirement System to cover the higher health care and pension costs for the fiscal year that starts July 1.
Through fiscal 2015-16, the county's five-year cost of health and pension benefits will reach a combined $15.6 million.
Nearly two-thirds of that amount, or $9.9 million, will be required just for health care costs, county budget forecasts show.
Department heads already are planning for the increased expenses and, so far, have closed all but $3.5 million of a projected $13 million budget gap for the upcoming 2011-12 fiscal year.
Most of the cuts so far involved elimination of 70 positions left vacant because of a hiring freeze.
A draft budget proposal goes before the Board of Supervisors on May 3; it will offer strategies for closing the remaining shortfall without the scores of layoffs and early retirements that marked prior years, Blacklock said.
In the last four years, Yolo County's workforce has declined from more than 1,700 workers to 1,252.
The county also imposed furloughs on the remaining employees and began a process of reorganizing departments and sharing workloads for greater efficiency.
Labor groups representing most county workers have agreed to forgo salary increases in the next fiscal year. Furloughs are continuing.
Some labor groups also have agreed to have employees pick up a portion of their retirement costs, Blacklock said.
But there's no assurance that budget problems gripping the state won't throw Yolo County's budget – and the budgets of all other counties – out of kilter.
California's deficit for the next fiscal year stands at $15.4 billion.
"The lack of action by the state leaves us in a continuous state of uncertainty that makes it very difficult to plan," Blacklock said. "All of this can be undone by what happens at the state."
Most counties, in fact, are figuring that the news from the state won't be good.
To prepare, Blacklock said, he will present a second, modified, budget proposal to county supervisors that will try to anticipate state cuts.
The chief uncertainty: Gov. Jerry Brown has proposed an extension of a portion of the vehicle license fee to help fund a realignment of state prisons.
The VLF fee, which provides about $2 million a year to Yolo County, expires June 30.
Brown's plan, contained in SB 109, would shift "lower level" criminal offenders away from prisons and into county jails.
Under the program, counties also would administer juvenile court cases and mental health programs and supervise adult parolees.
The worry among counties – including Yolo – is that additional funding won't be available or will be insufficient.
Blacklock said that if a measure extending taxes, including the vehicle license fee, does not go to voters, the governor has said he will sign a budget only if it makes up the state's shortfall through additional cuts.
Additional cuts would be bleak for Yolo County, Blacklock told department heads a few weeks ago, and would push the county's shortfall to as much as $18 million.
Erin Treadwell, spokeswoman for the California State Association of Counties, said counties already "have to plan for the worst. They are preparing for the expiration of the VLF."
If that happens, she said, it is likely to trigger layoffs of counties' public safety workers and probation officers, and reduce public services.
Treadwell said the association supports Brown's proposed ballot measure, which was drafted as a constitutional amendment, as a way to ensure sufficient revenue to carry out prison realignment.
In recent years, Yolo – like other counties in the region – was hit hard by declines in both property tax and sales tax revenues.
Now, just as sources of tax revenue are starting to stabilize, the county faces yet another tough budget challenge because of a rapid rise in pension and health care costs for employees and retirees, Yolo County Administrator Patrick Blacklock said.
The tally: The county will pay $4.8 million more to the California Public Employees' Retirement System to cover the higher health care and pension costs for the fiscal year that starts July 1.
Through fiscal 2015-16, the county's five-year cost of health and pension benefits will reach a combined $15.6 million.
Nearly two-thirds of that amount, or $9.9 million, will be required just for health care costs, county budget forecasts show.
Department heads already are planning for the increased expenses and, so far, have closed all but $3.5 million of a projected $13 million budget gap for the upcoming 2011-12 fiscal year.
Most of the cuts so far involved elimination of 70 positions left vacant because of a hiring freeze.
A draft budget proposal goes before the Board of Supervisors on May 3; it will offer strategies for closing the remaining shortfall without the scores of layoffs and early retirements that marked prior years, Blacklock said.
In the last four years, Yolo County's workforce has declined from more than 1,700 workers to 1,252.
The county also imposed furloughs on the remaining employees and began a process of reorganizing departments and sharing workloads for greater efficiency.
Labor groups representing most county workers have agreed to forgo salary increases in the next fiscal year. Furloughs are continuing.
Some labor groups also have agreed to have employees pick up a portion of their retirement costs, Blacklock said.
But there's no assurance that budget problems gripping the state won't throw Yolo County's budget – and the budgets of all other counties – out of kilter.
California's deficit for the next fiscal year stands at $15.4 billion.
"The lack of action by the state leaves us in a continuous state of uncertainty that makes it very difficult to plan," Blacklock said. "All of this can be undone by what happens at the state."
Most counties, in fact, are figuring that the news from the state won't be good.
To prepare, Blacklock said, he will present a second, modified, budget proposal to county supervisors that will try to anticipate state cuts.
The chief uncertainty: Gov. Jerry Brown has proposed an extension of a portion of the vehicle license fee to help fund a realignment of state prisons.
The VLF fee, which provides about $2 million a year to Yolo County, expires June 30.
Brown's plan, contained in SB 109, would shift "lower level" criminal offenders away from prisons and into county jails.
Under the program, counties also would administer juvenile court cases and mental health programs and supervise adult parolees.
The worry among counties – including Yolo – is that additional funding won't be available or will be insufficient.
Blacklock said that if a measure extending taxes, including the vehicle license fee, does not go to voters, the governor has said he will sign a budget only if it makes up the state's shortfall through additional cuts.
Additional cuts would be bleak for Yolo County, Blacklock told department heads a few weeks ago, and would push the county's shortfall to as much as $18 million.
Erin Treadwell, spokeswoman for the California State Association of Counties, said counties already "have to plan for the worst. They are preparing for the expiration of the VLF."
If that happens, she said, it is likely to trigger layoffs of counties' public safety workers and probation officers, and reduce public services.
Treadwell said the association supports Brown's proposed ballot measure, which was drafted as a constitutional amendment, as a way to ensure sufficient revenue to carry out prison realignment.
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