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Politics & Government

County's Midyear Budget Picture: Revenues Down

The report predicted that year-end discretionary revenue would total $578 million -- $6 million less than originally estimated.

Riverside County's discretionary revenue will be lower than expected in the current fiscal year ending June 30, but nearly all county agencies are on track to meet their spending targets -- just in time for another round of hefty budget cuts, according to county officials.

"Perhaps the most encouraging news (is) employment improved modestly again this quarter (and) business activity and associated sales are picking up," county Executive Officer Larry Parrish wrote in an introduction to the midyear budget report, which the Board of Supervisors will review during its Tuesday meeting.

"Unfortunately for the county budget, however, this has not translated into an increase in our dominant revenue source -- property taxes," Parrish said.

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The report predicted that year-end discretionary revenue would total $578 million -- $6 million less than originally estimated. The entire loss stems from a decline in property tax receipts, according to the Executive Office.

Documents indicated that the fire and sheriff's departments, as well as the Office of the Registrar of Voters, were expected to end the fiscal year in the red. The two public safety agencies began the fiscal year with deficits, which they managed to pare down.

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County fire is facing a $1.7 million shortfall, while the sheriff's office is anticipating a $2.5 million deficit, according to the Executive Office.

County officials expected that both agencies would be able to manage the overages. However, the ongoing concern from the sheriff's perspective was the impact of Assembly Bill 109, which made local public safety agencies responsible for imprisoning criminal offenders who fall into the non-violent, non-sexually-oriented category.

AB 109 advocates, most prominently the governor, argued the move would increase efficiency while reducing overcrowding in the state's 33 correctional facilities. However, the change in the law, which took effect Oct. 1, has led to a surge in the sheriff's inmate population, reducing available capacity to less than 3 percent, according to county documents.

With no long-term funding promises from the state, which California Controller John Chung this week said would be out of cash by Feb. 29 without increased borrowing, county officials are worried about the near- and long-term budgetary impact of AB 109.

Although other county agencies were expected to end 2011-12 in the black, Parrish cautioned that department heads needed to continue enforcing fiscal discipline.

The CEO reiterated that the county is facing an $80 million deficit at the start of 2012-13 and cutbacks will be necessary, though he didn't mention how many jobs may be on the chopping block.

He said the current strategy calls for a $40 million cut in discretionary funding for departments. Public safety agencies will be expected to absorb 3 percent spending reductions, while other departments' cuts could range as high as 28 percent, according to the executive officer.

The extent of cuts to staffing will become clearer during budget hearings in late March, Parrish said.

According to Executive Office documents, the county has around $160 million in reserves. The board allocated $28 million in rainy day funds to help balance the current fiscal year budget, but the supervisors were generally unanimous in their distaste for continuing to dig into the reserve pool to meet future needs, except during emergencies. --Paul Young, City News Service

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