Millions of dollars in department cuts, hundreds of layoffs, slashed services and no guarantee of future economic upswings face Santa Clara County in the next fiscal year, County Executive Pete Kutras reported Tuesday.
On the table is a $201.6 million deficit projected for fiscal year 2008. That deficit, stemming from accumulated shortages built up from temporary fixes to ongoing problems in years past and reduced federal, state and local financial support, will mean at least 500 county employees will lose their jobs by January 2008. And according to Kutras, that number could rise to 1,000 or more because the budget problems are not going away any time soon.
The county plans to balance the $2.3 billion General Fund budget by cutting about $155.6 million from departments, including nearly $34 million from the Mental Health Department, one of the hardest hit divisions, and about $70 million from the county's hospital. The county is asking Santa Clara Valley Medical Center to set aside $31.5 million in additional reserves to be used each year, thereby freeing up monies in the general fund for ongoing solutions. Additionally, the hospital is being asked to slash about $35.7 million in ongoing expenditures.
"We're setting a very high bar for the hospital," Kutras said.
Overall, the proposed reduction for the Health and Hospital area is about $109.9 million while the housing, land use, environment and transportation area is being asked to cut a comparatively meager $295,000. The recommended reductions in the public safety and justice area, which includes the departments of corrections, probations, district attorney, sheriff's and public defender among others, would amount to $22.2 million. In the finance and government area, which includes the departments of assessor, facilities and finance agency, among others, the recommended cut is $9.3 million.
Each department's estimated reduction is based on its share of the general fund budget, reductions made in prior years and their impact on services as well as the non-county revenue-generating capacity of each agency, according to the county report.
"I know we pride ourselves on prevention but unfortunately I think we are in a cycle where we can't afford prevention," Kutras said. And we're going to have to focus on paying for acute care at this point."
The recommendations received criticism from several county personnel, including a chairwoman for the county's Mental Health Board, who argued that the severity of the cuts to mental health services lacked "parity, equity and common sense."
"When we say prevention has to be tossed out the window, I have a serious problem with that," Santa Clara County Assistant District Attorney Rolanda Pierre-Dixon said. "I would hate to see our community become one of those communities that does not care."
District Attorney George Kennedy, whose department is being asked to slash $3.6 million from its budget, questioned the analysis behind the proposed cuts.
"The impact on jail population can't have been considered here," Kennedy said. "The fact that the DA's office has the largest span of supervision in the county can't have been considered in this recommendation."
Kennedy also doubted the accuracy of the county's general fund contribution to the district attorney's office, listed as nearly $63 million in 2007, arguing that the document incorporates half-cent sales tax revenue earmarked for public safety agencies by voters in 1994 as part of its general fund payment.
"Here in this county that half-cent sales tax is run through the county executive's office and it isn't recognized in the public safety agencies," Kennedy said. "This document shows us very large general fund contributions not offset by that public safety sales tax revenue as it should be to get a true picture of what the general fund contribution is to public safety agencies."
Supervisor Pete McHugh in turn requested a report from county staff detailing how much money it receives from the public safety tax, also known as Proposition 172, and how it is distributed.
Kutras noted that although the board today unanimously approved his recommendations in concept, the proposed reductions were far from set in stone and that the early projections were most of all an attempt to encourage talks between departments and county staff on how to deal with the dire budget situation.
In addition to the hefty department cuts and grant reductions for the hospital, the county proposes reducing retiree health care costs by half, generating $11.9 million each year. Another $2.6 million should come through dedicated revenue from the new Detention Facility Board.
The county has implemented $802.6 million in budget reductions over the past four years, and departments have absorbed approximately $312.5 million of those reductions. Most county supervisors hoped voters would pass a half-cent sales tax increase in June to alleviate some of the ongoing cutbacks, however, that measure, which would have generated an estimated $150 million per year for general county services, failed.
"We tried valiantly to elicit more support from the public and I regret ... that we didn't get that and I think we all feel some sadness that the public didn't feel sufficiently motivated to (pass Measure A)," Supervisor Liz Kniss said.
Supervisor Blanca Alvarado noted that the grave predictions meant county staff would have to be creative in finding solutions.
"It really is going to have to be a matter of more efficiency, more effectiveness and more streamlining," she said.
Alvarado added, "We have been steadily inching toward the abyss and we are now at the very edge of it and it is very frightful."