County Faces Big Cuts in Governor’s Budget

By J. Douglas Allen-Taylor
Tuesday February 05, 2008

Gov. Arnold Schwarzenegger’s proposals to fix a projected $14 billion state budget deficit could cost Alameda County as much as a half a million dollars in borrowing costs alone and millions of dollars more in federal matching money, according to a veteran county supervisor. 

Alameda County Supervisor Keith Carson spoke in a telephone interview this week as county officials moved through a series of state and local meetings to respond to the economic downturn and the state and local budget crises.  

In addition to proposing 10 percent across the board budget cuts in his 2008-09 budget, Schwarzenegger has declared a fiscal emergency in the state and has called on the legislature to meet in special session to meet the crisis.  

The governor has also proposed a one- to five-month delay of state payments to local jurisdictions in order to balance the state budget, a tactic that would hold up $55 million in payments to Alameda County alone in the areas of health, social services, and public works. 

“The delays would be for services which have already been provided,” Carson said. “We have to come up with the money to pay for those services while we would be waiting for the state payments to be received.” 

Carson said that even if the $55 million state payments were eventually paid, the estimated $500,000 needed to be spent on borrowing fees to bonding and financial institutions would not, and would have to be absorbed by the already-stretched county budget. 

Carson said he personally raised these issues with Schwarzenegger during a meeting with the governor last week. 

“The governor probably thought that local governments had a cushion in their general funds to absorb the delays, but I told him that it doesn’t exist for Alameda County,” Carson said.  

The supervisor said that since the early 1990s, when the state began withholding local payments in order to balance its own budget, Alameda County has lost an estimated $3 billion in operating revenue owed to it by the state.  

“We haven’t recovered from those losses,” Carson said. “There’s no rainy day fund. We’re not flush with cash.” 

Carson said the county is already suffering from a backlog in social service cases, longer waits for medical services, and deferments to road improvements in unincorporated areas that would be exacerbated by the state fund withholding.  

Close to half of Alameda County’s $2.3 billion annual budget comes from federal, state, and local financing. Of that, 28 percent goes to public assistance, 22 percent to health care, and 23 percent to public protection.