Wednesday, February 21, 2007

Supes grapple with tight budget

By: Gus Thomson, Journal Staff Writer

With a slump in the housing market slowing property tax revenue growth and worker costs rising, Placer County supervisors were warned Tuesday to expect some tough budget decisions in the coming months.

Projections are that tax revenue next fiscal year will grow by $7.1 million -- which won't offset the $28 million county budget forecasters say will be needed to sustain operations at current levels. This year's budget is $689 million.

At the same time, county department heads have identified $25.1 million in new expenditures next fiscal year that they would like to see approved.

Therese Leonard, County Executive Office principal management analyst, said that means early budget discussions are working with a total of about $53 million in new requests.

County Executive Officer Tom Miller said that in meeting with department heads in December and January, he put out the message that it's going to be a tougher year than in the recent past.

The $53 million total doesn't include any possible spending priorities by supervisors. This year, for instance, $1.5 million was allocated for a new Sheriff's Department helicopter.

Miller said that part of the budget process in the next few months will be determining Board of Supervisors priorities to provide "a clear direction" to staff as it develops a 2007-08 fiscal year spending plan.

Supervisor Bruce Kranz advised that he wants supervisors to take a close look at any state programs where funding has been discontinued and the county has taken over payments.

"I want to know our obligations after the state discontinues funding," Kranz said. "Especially when we're looking at a budget as it was presented. We have to start talking about priorities right now."

Key dates coming up for the board include a workshop on March 27, adoption of a proposed budget in June, three days of intensive budget workshops in August and adoption of a final budget in September.

Labor costs make up $20 million of the projected $28 million needed to maintain current service levels. Leonard said department heads have been asked to constrain costs and contain much of the possible increases in their own budgets.

The other $25.1 million in potential new spending includes 61 new staff positions. Public safety sectors, including the sheriff's department and the district attorney's office, have asked for $15.9 million of the total.

Leonard also outlined to supervisors that building-related revenues are proving to be the biggest drags on the budget. Real-estate transfer taxes are down this year by $953,000, supplemental property taxes declined $997,000 in the first six months of the fiscal year, and construction permit revenues dropped $507,000.

The Journal's Gus Thomson can be reached at gust@goldcountrymedia.com.