County Pension Costs Incr. Faster Than Revenue

Dec 31, 2010 by Dick.Thomson

Ventura County government is facing a mixed budget picture in the new fiscal year, with revenues hinting of a slight turnaround amid heavy pension costs.

“As the economy recovers, our revenues will recover,” Chief Financial Officer Paul Derse said this week.

Derse said property tax collections appear to be headed up for the 2011-12 fiscal year after taking a hit from falling values. The county’s fiscal year begins July 1 and ends on June 30 of the following year.

Under Proposition 13, tax bills can go up each year by no more than 2 percent for inflation. They didn’t get close last year with the state Consumer Price Index falling to a minus 0.24 percent.

It was the lowest rate since California voters passed Proposition 13 in 1978, Derse said. The figure for the current fiscal year drifted into positive territory at 0.75 percent, the second lowest on record, he said.

But if both higher inflation and higher home values materialize, Derse expects revenues could grow by close to $4 million for the county general fund in the next fiscal year.

It would be a small percentage, just 1.5 percent above the $250 million now available in secured property taxes, but still a reversal, he said.

The general fund helps pay for various services, including law enforcement, general government, environmental programs, and health and human services. Countywide, all taxing entities could see an additional $16 million above the $1 billion they’re currently getting, he said. Those agencies include cities, school districts and special districts.

Pension costs, however, are increasing faster than property tax collections. They’re growing by $25 million a year because county government is still covering losses from the market meltdown of the 2007-08 and 2008-09 fiscal years.

County government paid $96 million in 2009-10, but that’s due to increase to $121.9 million this fiscal year and to $146.9 million in 2011-12. For the current year’s budget, the major unknown is the impact of the Christmas shopping season on sales taxes for public safety. The Sheriff’s Department gets 72 percent of the money from a half-cent sales tax measure, while the District Attorney’s Office and Probation Agency each draw 10 percent. The Public Defender’s Office and Fire Department both get 4 percent.

Derse said those revenues look to be running about $50 million for the current fiscal year. That’s $2 million ahead of what was collected in the previous fiscal year but $4 million less than projections.

Geoff Dean, who will be sworn in as sheriff Monday, said he’s hoping for an upturn from holiday spending. He is also cutting about $1 million in management costs and leaving vacancies open to stay within budget.

“We’ll be fine for the rest of the year,” he said.

Derse said midyear budget revisions will not go to the Board of Supervisors until March. Meanwhile, he is asking department heads to advise him of where their spending will stand by the end of the current fiscal year.

Unknown is how the state’s budget gap of nearly $30 billion will hit counties, said Supervisor Kathy Long, chairwoman of the board.

More should be known after the incoming governor, Jerry Brown, makes his State of the State address in January, she said.

“It certainly looks like the governor is saying if we don’t make some cuts somewhere, he’s going to take it to the voters to see if the voters are willing to raise taxes,” she said. “That will be just one waste of time and energy. Wherever the state makes cuts, that’s where we will be forced to make cuts.”