Susan Valot
May 18, 2009
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Federal stimulus dollars may help, but it won't be enough to keep Orange County from taking a billion-dollar budget hit. KPCC's Susan Valot sat in on a county budget briefing in Santa Ana today to learn where officials want to make those cuts.

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Susan Valot: The Orange County Budget Office says sales tax revenue is 10 percent less than expected. That's one reason the county's budget guys recommend cutting the total budget by a little more than a billion dollars – down to five-and-a-half-billion dollars for the next fiscal year that starts in July. County Budget Director Frank Kim:

Frank Kim: Clearly, this is probably the most difficult budget we've had – at least many people that were around for the bankruptcy said it was the most challenging since then.

Valot: "Then" was 1994, when bad investments drove Orange County into bankruptcy. This time, it's a bad economy.

At the beginning of this year, the county laid off about 200 social service workers to save money. Now, more than 400 other county positions could go.

And on top of that, state lawmakers could take away money that usually goes to local governments. Kim says for Orange County, that hit could amount to nearly $37 million.

Kim: If the special election measures fail, as part of balancing the budget, the state would borrow 8 percent of local property taxes. That affects counties.

And within the county, it affects the library system, the flood control district, our parks system, and the county general fund. And it affects, in the broader community, cities, because they receive property taxes.

Valot: But Orange County Budget Director Frank Kim says he can't plan for what might happen to the county budget if the state takes away a chunk of the property tax revenue.

Kim: We can't take those kinds of reductions and build 'em into our budget now because we don't know ultimately what the amount could be.

Valot: But what county budget directors do know is some cuts will come, regardless of what the state does. Social Services already made big cuts during this fiscal year. The sheriff, the district attorney, and other public safety agencies take their turn next fiscal year, which starts July 1st.

They rely the most on sales tax. The cuts could include closing Orange County's women's jail and shifting those inmates into other facilities. Ultimately, it'll be up to the Board of Supervisors to decide where to make the cuts. Those decisions will come after next month's budget hearing.