Alameda County's Budget Shortfall is Lowest in 7 Years

The funding shortfall in Alameda County's proposed budget for the new fiscal year beginning in July is the lowest in seven years but the county still faces financial challenges, the county administrator told the Board of Supervisors today.
 
In presenting the proposed budget for the 2014-2015 fiscal year, County Administrator Susan Muranishi said revenues from property and sales taxes are increasing and the county's unemployment rate has dropped to 5.7 percent, marking the first time it's been below 6 percent since the recession started more than six years ago.
 
She also said Alameda County's population grew by 1.5 percent, to almost 1.6 million people, last year, making it and Santa Clara County the two fastest-growing counties in the state.
 
But Muranishi said, "The economic recovery has not benefited everyone equally" and Alameda County has more than 50 neighborhoods with poverty rates of more than 25 percent and historically high numbers of families, adults and children who receive safety-net services.
 
Despite the implementation of the federal Affordable Care Act last year, Muranishi said an estimated 100,000 people in the county may still be uninsured and require county indigent health care services. She added that glitches in California's implementation of the federal program, including problems with the state's computer system, have created a backlog of more than 40,000 applications that Alameda County staff members must review on a one-by-one basis. Muranishi is proposing a total budget of $2.8 billion for the next fiscal year, which represents an increase of $86.7 million, or 3.2 percent, over the current year.
 
The proposed general fund, which funds most county operations, is $2.4 billion, an increase of $53.5 million, or 2.4 percent, over the current year. The funding gap, which is the difference between the cost of maintaining existing programs and projected revenues, is $67.1 million. The funding gap in the current year was $80 million and most gaps in recent years have been more than $100 million. Muranishi said she is proposing that about 75 percent of the funding gap be closed by making about $50 million in one-time strategies such as efficiency efforts and the other 25 percent to be achieved by making about $17 million worth of cutbacks in programs and staffing.
 
She said much of the savings will come from the county's ongoing fiscal management reward system, which allows departments to carry over net savings each fiscal year to be used in subsequent years to balance the budget and help preserve important services.
 
The proposed budget calls for nearly 9,500 full-time county employees, an increase of nearly 300 workers over the current year. It also includes cost-of-living adjustments for most county employees, Muranishi said. Looking to the future, Muranishi said Alameda County faces a "wall of debt" of almost $3 billion, with pension costs for current and future retirees accounting for $1.2 billion of that amount.
 
Muranishi told the Board of Supervisors that it must again "maintain that critical balance between service demands and limited financial resources." The board is scheduled to hold public hearings on the budget on June 23, 24 and 25 and adopt it on June 27.

—By Bay City News