County Stares at Budget Nightmare

The budget crunch is beginning to take its toll on the Santa Barbara County Board of Supervisors, with two members bickering Tuesday and a third speaking of an impending emergency of disastrous proportions. Enormous questions remain about where the county stands financially as it heads into the future years of potential fiscal instability, and they loom all the more heavily in respect to Gov. Arnold Schwarzenegger’s announcement that the State Legislature will be called into a special session November 5 to address its disingenuous budget, which now has a potential deficit of $10 billion, as opposed to the previous $3 billion.

Every individual dollar is being scrutinized these days, as demonstrated early in the supervisors’ meeting, when, with 2nd District Supervisor Janet Wolf dissenting, the board voted to contract out a construction project to build an aquatics complex in Cuyama. Along with the new pool will be a budget commitment of $168,000 annually to run it. “We’re talking about our financial crisis but we find it very easy to allocate money,” Wolf decried. That touched a nerve with Supervisor Joe Centeno, whose 5th District encompasses Cuyama. He suggested the board had neglected Cuyama while turning down “project after project” that could have “dumped that revenue stream to the county.”

While that battle focused on smaller funds, state auditing indicates the county ship might be dealing with a bigger iceberg. Recently, an audit of the county’s department of Alcohol, Drug & Mental Health Services shows that the county, from 2002 through 2007, might’ve goofed in its billing and consequently owes $17.1 million in cost settlements with the state for MediCal reimbursements. The county only has $3 million in its reserves to cover such exceptions.

Similarly, county officials were in Los Angeles Tuesday appealing a state finding that other departments’ MediCal reimbursements should have been disallowed. The county’s potential liability in these cases totals $14.4 million. According to budget director Dr. Jason Stilwell, granting for the program expired, but the program continued. The state surely isn’t going to cut any slack to anyone who owes it money, as it’s in quite the bungle itself.

And while the county waits to hear from the state how these scenarios will impact its coffers, it still has a long list of other fiscal issues. While the county has secured state funding to pay most of the costs resulting from a North County jail, the county will have to spend $17.4 million annually to operate it. Should Measure A fail to pass on Tuesday, the county will have an $8 million hole in the Public Works Department to deal with road projects and construction. County officials aren’t positive they’ll be reimbursed by the state for the $1.5 million cost of the June election, and the county’s tax revenue from the neutrality agreement with Goleta will be decreasing come 2011. And that’s not even mentioning the potential mid-fiscal-year cuts in coming months, or the likely cuts coming next June.

That’s why, in a decision made on October 21, the supervisors chose to furlough the majority of county jobs for a two-week period over the holiday season in an effort to save money. County operations will be closed between December 22 and January 4, an already minimally staffed period traditionally. While emergency personnel will still be operating, all others will be closed either for part or for the entire period, saving the county at least $10.1 million.

The recent moves and news has rankled some county employees. Mindy Boulet, a deputy public defender, said that most all of the attorneys in her office object to the furloughs. “We do so in protection of our clients’ interests,” she said, listing several counties where the public defender’s office wasn’t furloughing anyone. Additionally, she explained, the district attorney’s office wasn’t being furloughed, and “the cases keep coming.”

Hope could come from a crude oil production tax, which would have to be approved by voters. The earliest that measure could go on the ballot is 2010 because it has to coincide with the election of at least one supervisor. At a theoretical price of $1.20 per barrel, the county could raise more than $184 million within a decade. And the freshly approved PXP drilling project could bring the county almost $2 million in its first year of inception, and $12.5 million in its peak year, 2012.

But that is down the road, and the county’s problems are now. “This is as bad a situation as I’ve ever seen,” said outgoing 3rd District Supervisor Brooks Firestone. “The cumulative problems we have are of a crisis nature.”