Inyo County nears budget approval
Proposed budget anticipates looming structural deficits.
Former U.S. President George W. Bush once said, “It’s clearly a budget. It’s got a lot of numbers in it.” In that sense the Inyo County’s CAO Recommended Budget for 2014-2015 is “clearly a budget” with slightly over 600 pages of numbers totaling expenditures of $88 million (the largest in the county’s history) and revenues of $834 million.
Only slight changes are being made to the final budget, which will be tentatively voted on at next week’s Board of Supervisors meeting, or no later than their September 16 meeting.
The shortfall in the budget is called “the structural deficit.” There is an expression, “Rob Peter to pay Paul,” that essentially explains what a structural deficit is; except it’s more like “taking savings from Peter to pay Paul.” Money saved from the previous year’s budget is essentially forwarded into the next one.
Structural deficits are common budgetary practice in many cities and counties in California and can only be addressed by either reducing government spending or increasing revenue, which usually means either increased fees or taxes.
The annual fund balance history of Inyo County from one year to the next shows an average savings of $3.5 to $3.8 million. However, throughout this year’s budgeting process, County Administrator Kevin Carunchio has cautioned the board that it is going to be increasing difficult to maintain that level of budget balances even though the structural deficit was reduced this year by $1 million.
“Trends first identified in last year’s budget continue to suggest that methods used to balance this year’s budget cannot be sustained,” cautioned Carunchio, “and fund balances will be smaller and smaller.”
He also told the Board that “trust funds are shrinking, the cost of public safety costs keeps going up, and there will be less savings from eliminated jobs as time goes on.”
While no layoffs have yet occurred, many County positions have been eliminated by attrition (not filling position vacancies), a selective voluntary retirement program, and combining or “sharing” of some jobs between departments, resulting in savings.
Selected fee increases were implemented to increase revenue, but ideas for a tax increase in the Transaction and Use Tax (TUT) in partnership with the City of Bishop from .05 percent to 1 percent to increase revenue for public services, and a proposal from the County’s Planning Department to legalize the use of residential homes as vacation rentals to increase revenue from the County’s Transient Occupancy Tax (TOT), were rejected by the Board of Supervisors.
The County’s Service Redesign Program, initiated by CAO Carunchio and the Board of Supervisors, brought in a significant $666,000 in savings, although some of the ideas for redesigning programs, such as proposals to make significant changes to the Senior Services Program, are still being explored by the Department of Health and Human Resources.
While there was considerable outcry from seniors on some of the proposed changes by HHS to reduce the considerable deficit spending for the program, the general consensus was that changes are likely and could provide very significant savings to the tune of several hundreds of thousand dollars to the General Fund. Those savings will likely be applied to the upcoming budget process for 2015-2016.
The specter of significant structural deficits will go on to the future.
At the end of Wednesday’s budget meeting, Board members discussed the County’s Community Project Sponsorship Program. Community groups which benefit from the grants provided under the program for events or projects range from local Chambers of Commerce to Wild Iris and the Mt. Whitney Fish Hatchery. Their proponents expressed great relief and gratitude to the Board that there was only a proposed 5 percent reduction in grant funding. They had feared much worse.
CEO Tawni Thomson of the Bishop Chamber of Commerce said afterwards, “A 5 percent reduction is reasonable. Given the severity of the deficit, there is a need for ‘shared sacrifice’ from everyone that benefits from the County’s support. This was very fair and we are grateful that it was not much worse.”
Copies of the 2014-2015 Inyo County CAO Budget Recommendations can be found at the local public libraries throughout the County, and online at the county’s website, http://www.inyocounty.us.
