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The Alameda County Administrator’s office has issued a new county budget that closes a projected $52 million funding gap with no layoffs and no program cuts, but County Administrator Susan Muranishi warned reporters at a Wednesday briefing that the governor’s proposed “solution” to the state’s incarceration problem could throw her calculations out of whack. 

In addition, Muranishi said that the savings procedures used to balance this year’s budget may not be available if the county’s economic picture grows bleaker in coming years, and that in particular, steadily rising General Assistance costs may cause the county to come up with ways to curb its welfare program in the future.  

County general assistance cases per month are projected to jump 24 percent in the next two years (4,071 to 5,064), while SSI applications approved per year are expected to jump 79 percent in the same period (534 to 957). 

“Our case load is growing,” Muranishi said. “The supervisors are going to pull together a working group to address this problem. They won’t adopt any changes to general assistance when they adopt this year’s budget, but they will have to put something in place for next year.”  

County supervisors are scheduled to begin hearings on the proposed $2.36 Alameda County budget on June 26th. Muranishi called this year’s budget a “maintenance budget” that keeps services and programs intact, doing no more and no less. 

The county administrator’s guarded assessment puts Alameda County’s budget forecast decidedly ahead of the situation projected by the civil grand jury in neighboring Contra Costa County. In a report first highlighted on the East Bay Express 92510 Blog, the Contra Costa County Grand Jury is warning that county supervisors are courting financial disaster by failing to address the escalating cost of employee and retiree health benefits. 

Entitled “May Day, May Day, May Day! The County Drifts Ever Closer to the OPEB Rocks,” the Grand Jury report summary says that “Contra Costa County is facing a financial ‘perfect storm’ as the cost of medical and dental benefits granted to retirees are being driven upward by increases in the number of retirees, inflation, and costly advances in medical science. The County Board of Supervisors has not adequately addressed the financial obligations of the Other Post-Employment Benefits (‘OPEB’) facing the County and, as a result, is mortgaging the County’s future. Escalating retiree health care benefit costs are threatening the County’s financial condition, and with it the ability to deliver essential services.”  

In Alameda County, Muranishi believes that there are financial problems, but that the county is facing them. 

The administrator’s office estimated the $52 million shortfall last April, but closed that shortfall in the intervening two months with reductions across the board—$10 million apiece from general operations and the county Health Care Services Agency, $16 million apiece from public assistance and public protection. But only $6.4 million of those fund reduction strategies are ongoing and can be automatically used next year; the remaining $45.7 million in reductions are one-time strategies available for this year only. 

“There’s no guarantee that these savings can be replicated as our budgets get tighter,” Muranishi told reporters.  

In her letter to supervisors, Muranishi said that the lag in the state’s economy as well as state and federal budgetary problems paint a grim, though not catastrophic, picture for Alameda County’s budget. 

“The State’s economy continues to lag due to the downturn in the housing market,” she wrote. “Very slow economic growth is projected over the coming months, although the housing recession is not expected to spread into other business sectors. State’s Legislative Analyst predicts a multi-billion dollar State Budget operating deficit for FY 2007-08 that will continue into the next several fiscal years. At the same time, the President’s proposed Federal Fiscal Year 2008 Budget is not balanced and includes significant reductions in mandatory and discretionary spending for domestic programs in the upcoming and next several fiscal years. These trends, coupled with double digit increases in health and retirement benefit costs, have compounded the challenge of developing a balanced budget that preserves vital services.” 

Muranishi said that 25 percent of the county’s budget is non-restricted money that supervisors can use at their discretion. She added that with close to 60 percent of that money coming from property tax revenue, Alameda County is particularly vulnerable to downturns in the housing market. 

And a possible jump in the county’s incarcerated juvenile offenders also looms as a problem. 

Last December, as part of what he called a “comprehensive prison reform proposal,” Governor Arnold Schwarzen-egger proposed “placing some low-level and juvenile offenders in county facilities rather than state facilities to allow offenders who pose a minimal public safety risk to serve their sentences closer to their communities and families.” A press release by the governor’s office called this move “particularly important for juvenile offenders,” a position that was echoed by the Ella Baker Center, an Oakland-based progressive peace and justice advocacy organization, which said in a recent release that “for more than three years, we have been calling on Sacramento to close down California's abusive, expensive and woefully ineffective youth prison system. In his May revision to the state budget, Governor Schwarzenegger is looking to take us one step closer to that goal by permanently closing the DeWitt Nelson youth prison [in Stockton]. This is a major advance for our campaign. It’s becoming obvious to everyone, even the governor, that these prisons aren’t working and need to be closed entirely. A Department of Corrections spokesman said that they are already looking at closing the notorious [Heman G.] Stark [Youth Correctional Facility in Chino] next.” 

But Muranishi said the move to close state youth facilities and transfer some youth offenders back into the counties is a potential economic hit to Alameda County, with the size of the hit dependent upon the number of offenders transferred. 

“The governor is proposing to pay each county $94,000 per year, regardless of the county, for each youth inmate transferred to the county from a state youth facility under this program,” Muranishi said. “But our cost is $160,000 a year to house a juvenile offender. We will have to make up that shortfall.”