No deficit of good news in this budget

Chief Executive Officer William T Fujioka says his budget proposal reflects years of fiscal discipline in the county.

Just three years ago, in the thick of the Great Recession, Los Angeles County officials proposed a budget to the Board of Supervisors with a deficit of more than $490 million, prompting an extraordinary belt-tightening that forced some county departments to slash spending by more than 30 percent.

Back then, Chief Executive Officer William T Fujioka put the best spin possible on the gloomy situation. Despite the gaping shortfall, he said, the county had not been forced to significantly reduce services or lay off workers, who’ d agreed to forgo raises until the crisis had passed.

It looks like that day may have come.

On Monday, CEO Fujioka offered a $24.7 billion spending plan for board approval that, for the first time in five years, has no deficit and no proposed cuts. This year, there’ll be no raiding reserves or other one-time funding solutions.

“This is unheard of, not only here within the county but throughout the state of California,” Fujioka said of the county’s proposed zero-deficit budget, which will be financed entirely by ongoing revenue sources. Departmental cutbacks, efficiency initiatives and rising property and sales tax revenues were central to the budget turnaround, Fujioka said. But the county could not have weathered the economic storm, he stressed, without the fiscal discipline of the Board of Supervisors and the cooperation of employee unions.

Unlike City of Los Angeles workers, whose raises have been blamed for the city’s dire finances, county workers haven’t received a cost-of-living raise in five years—a savings of hundreds of millions of dollars that has helped preserve programs and save jobs. The unions agreed to the arrangement so long as the money would begin to flow once the county’s finances were back on track. Union leaders are wasting no time holding the county to its word; Fujioka said his office already has begun negotiating with public safety unions.

Jim Adams of the CEO’s office, who’s been negotiating with the unions for a little more than a month, says he expects there’ll be “some kind of pay increase.”  Citing the confidentiality of the talks, he declined to be more specific but cautioned that every 1-percent increase in the county workforce’s payroll amounts to close to $40 million, not including benefits. “We’ll be sweeping the budget corners,” looking for ways to fund raises, he said.

Adams and others said they expect a chunk of that to come from rising property tax revenues, which are likely to exceed the Assessor’s conservative forecast of 2.88 percent for fiscal year 2013-2014.

For the most part, the new spending plan holds the line on departmental budgets that have been pared back during the past five years, recommending only small spending increases or none at all. “We’re not going to quickly and blindly restore people” to departments without a specific need, Fujioka said during a morning news conference. He cited, for example, a reduction in the number of clerical workers in the treasurer’s office to process property tax payments. As a result, the payments took an extra day or two to deposit in the bank, Fujioka said, costing the county “a lot of money” in interest.

The CEO says he is, however, recommending that new funding be used to enact a series of reforms urged last year by the Citizens’ Commission on Jail Violence, which investigated alleged deputy brutality within the county’s lockup. Among other things, Fujioka said he’s proposing that $5 million be set aside each year for the soon-to-be-created Office of the Inspector General, which will oversee and monitor sheriff operations in the jail and on the streets.

Fujioka also cautioned that unforeseen budget pressures could arise from the full implementation next year of the Affordable Care Act, as well as the continuing implementation of a massive transfer of responsibilities from the state to the county for supervision of ex-California prison inmates.

Still, despite such uncertainties, Fujioka’s press briefing had the feel of a victory lap as he praised the leadership shown by the five members of the Board of Supervisors, who’ll begin public hearings on the budget in May.

“You probably think it’s easy for a guy like me to say something like that because they’re the people I work for,” Fujioka said. “But it’s the absolute truth.”

(For a quick-paced video primer on the county budget process, click here.)

Posted 4/15/13