Sonoma supervisors grapple with $21M deficit

January 11, 2009 4:33:09 PM PST
The Sonoma Board of Supervisors will address a projected $21.4 million deficit in the 2009-2010 general fund budget during a workshop session Tuesday.

County Administrator Bob Deis said there also is an anticipated $17 million deficit in programs that depend on state and federal revenue.

Deis is recommending all departments immediately reduce their current year budgets across the board by 5 percent. He also suggests a second 5 percent cut across the board in the 2009-2010 budget.

Budget hearings should take place in June, two months earlier than usual, Deis suggested.

The county's general fund budget also faces $12 million annual deficits after 2009-2010, Deis said.

"Overall general fund resources are projected to drop nearly $32 million or 7 percent for fiscal year 2009-2010," Deis said in his budget proposal to the supervisors.

Of the $32 million reduction, $9 million reflects one-time revenues in fiscal year 2008-2009 that won't be repeated in 2009-2010, Deis said.

Secured property tax revenue is expected to decrease from $189.4 million in 2008-2009 to $186.6 million in 2009-2010, Deis said. Property tax revenue increased $37.6 million during the previous three years, Deis said.

Sales tax revenue is expected to remain flat at $15 million in 2009-2010's budget.

"There is no reliable indication that these resources will rebound in FY 10-11 nor into FY 11-12," Deis said.

Property taxes typically trail behind any economic recovery and there are no forecasts that suggest robust recovery in property values into the foreseeable future, Deis said.

"This revenue category makes up approximately 72 percent of our General Fund discretionary revenues," Deis said.

Total salaries and benefits are projected to increase $16 million or 5.9 percent in fiscal year 2009-2010 compared to the previous year, Deis said. Of the $16 million, $7 million is part of a 3 percent cost of living adjustment for salaries that are subject to negotiation, Deis said.

The county's portfolio in the stock market lost 30 percent in the fall of 2008, Deis said.

The County Administrator's Office is nor recommending a hiring freeze because county departments are already preparing reduction plans and are filling only critical positions and instituting internal hiring freezes, Deis said.