Double-digit cuts may be in store for some Riverside County agencies over the next few years as the county contends with a growing set of cost burdens and relatively flat revenue, Paul McDonnell, the county chief financial officer, said.
“What’s our strategy?” McDonnell said, addressing the board of supervisors. “We’ve got to put a budget in place that is balanced and maintains core services.”
During an afternoon session that set the stage for budget hearings in June, McDonnell went through a list of spending obligations that threaten to push the county’s structural deficit deeper into the red. The CFO said discretionary revenue sources, including sales and property taxes, were going to be inadequate to meet funding needs for the East County Detention Center in Indio, slated to open in phases next year, as well as cover all costs associated with health services for inmates guaranteed under terms of a lawsuit that the county settled over a year ago and skyrocketing expenses tied to the state-mandated In-Home Supportive Services program.
Chief Executive Officer Jay Orr called the IHSS challenge “the most significant” on the board’s radar going into the 2017-2018 fiscal year and beyond.
Though Gov. Jerry Brown and majority party leaders in the Legislature haven’t made it unequivocally clear that IHSS costs will be fully borne by counties, all indications make a worst-case scenario likely, Orr said.
“We are braced for a … scenario in which the county absorbs $37 million in additional net cost,” he said in a statement posted to the board’s agenda.
In view of that likelihood, Orr said the Executive Office was directing most departments to prepare for a straight 6.5 percent chop in general fund support in the next fiscal year.
IHSS is a Medi-Cal program that provides direct assistance to low-income seniors and the disabled who are living independently, including meal preparation, bathing, medication dispensation and other on-site care.
The governor stated in his January budget proposal that IHSS costs, due to growing recipient demand and higher labor expenses, had ballooned beyond appropriations limits established four years ago, adding to the state deficit.
The California Department of Finance recommended realigning IHSS costs, making counties responsible for the lion’s share, and Brown agreed.
According to county officials, IHSS caseload growth is averaging 13 percent per year. By 2023, they said, the county could be on the hook for a total $165 million in additional IHSS expenses.
“They’re dumping on us,” Supervisor Marion Ashley said. “This is a federal program (under Medicaid). They can’t just squeeze more money out of the county like an ATM machine.”
Department of Public Social Services Director Susan Von Zabern told the board that efforts are persisting to convince the governor and Legislature to find a compromise and not foist the bulk of IHSS costs onto counties.
According to McDonnell, current budget planning largely excludes public safety agencies from future spending cuts, so general government departments would have to bear the brunt of reduced appropriations.
“These would be deep cuts,” McDonnell said. “Departments could have to absorb 10, 20 percent cuts.”
Those reductions would be part of the county’s five-year planning horizon.
Other matters weighing on future finances include escalating internal service costs and insurance premiums, in addition to higher county contributions to backfill the under-funded California Public Employees Retirement System and outlays to meet rising labor expenses promised under collective bargaining agreements.
Orr said the goal is to avoid depleting the county’s $150 million reserve pool, which factors into its creditworthiness.