County CEO Releases Budget Proposal, Without Layoffs or Furloughs

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City News Service

Despite a $220.9 million budget deficit heading into the coming fiscal year, Los Angeles County officials said Monday they will be able to close the gap without resorting to layoffs or requiring workers to take unpaid furlough days.

County Chief Executive Officer William Fujioka said his proposed $23.3 billion budget for the 2011-12 fiscal year includes $35.7 million in spending cuts, use of one-time funding and the elimination of 257 vacant positions to help eliminate the shortfall.

Over the past four years, the county has eliminated a total of 2,735 unfilled positions worth about $406 million in savings, he said.

“We’re making a structural change to our budget to improve the foundation of our budget for future years,” he said.

The county will not have to tap into its “rainy day fund” or economic reserves to balance the budget, he said.

“The County of Los Angeles remains better positioned than most other state and local governments to manage these extraordinary events,” Fujioka said, referring to the lingering impacts of the recession and increased demand for county services.

He credited the Board of Supervisors for the county’s relatively good fiscal position.

“Where we are today is a prime example of what happens when you have an experienced board staying in place and living through the consequences of their actions,” Fujioka said, making an argument against term limits.

He said employee labor unions have been a good partners, enabling the county to reduce its benefit costs by about $75 million.

Fujioka said that while some municipalities are asking their union members to forgo a cost of living increase, “We have three years of zero COLAs (cost of living raises) that our labor partners have agreed to to help us through this very difficult time.”

He added that the county might ask its union members to start paying some percentage of their medical retirement benefits. As it stands, they don’t pay any amount toward retirement health care.

Bob Schoonover, head of the Service Employees International Union Local 721, which represents more than 55,000 county workers, said he would reserve comment on that possibility until he saw some firm numbers from the county.

Schoonover said that after giving up significant benefits during the recession, the union plans to wait for the economy to improve before asking for increased benefits.

“We have a contract that runs into late 2012. We will wait to see how the economy improves,” he said, adding, “We would like to see the economy improve, and we would like pay raises.”

Fujioka also expressed concern about huge cuts in the state and federal budgets that have been proposed, but not yet finalized and would have a significant negative effect on the county’s budget.

The county is anticipating a $366 million hit from the state budget alone, hitting mainly health and social service programs. It is also examining the impacts of a potential elimination or reduction of federal block grants for Medicare and Medi-Cal patients.

“It would have a horrific impact on our programs and services,” Fujioka said.

If the block grants are cut, he predicted, health providers around the county will stop seeing Medicare and Medi-Cal patients. The only choice will be to come to the county, which he said already has long lines in emergency rooms.

“And you’ll see an impact on emergency services. You’ll see an impact on every single county health care program,” Fujioka said. “We are the facility of last resort.”

Fujioka said the proposed state and federal budget cuts were not factored into his proposed budget because the situations in Sacramento and Washington are in so much flux.

“Continuing to maintain service levels, avoid significant layoffs and produce a balanced budget will only be possible to the extent recent economic indicators showing signs of improvement are sustained,” he said.

Fujioka noted that two bright spots include sales and property tax revenues that are expected to increase by 0.7 percent in 2011-12, marking the first year-over-year increase since 2006-07.

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