Kings County government leaders painted a grim picture Tuesday -- a prediction of what would face the county if the state makes good on its proposal to delay payments until August. Still grappling to close the massive budget hole, California is proposing to defer payments to counties for seven months. County officials say such an action would affect the poor, young and elderly, who are most vulnerable in these economic hard times.

Among the deferrals proposed is an estimated $3.3 billion in total statewide funding for health and social services, such as food stamps, mental health managed care and foster care. Counties run these programs for the state and federal governments.

"If they do pass through the federal share, just for the Human Services Agency alone, the total cost to the county for February through August to pick up the state share is about $12.4 million," county Administrative Officer Larry Spikes told the Board of Supervisors Tuesday. "There is no way the county has the reserves to be able to do that. Not only will we be talking about shutting things down, but it will be really difficult to get things going again because there is a great impact on people right now.

"Lines are growing at the Human Services Agency as a result of the economic times that we're in," Spikes said.

The state already deferred payments in July and August for various human services programs.

One month-deferral of state payments for the these programs would cost the county about $1.8 million, said Staci Phelan, management analyst.

The county has $4.1 million in reserves specifically meant for economic hardship. That could help keep the operations afloat, but not for long, Phelan said.

"In a nutshell, we have two months of operating if the state does not fund us," Phelan said. "Another option would be to reduce or shut down some programs."

Shutting down programs would lead to losing them permanently because the federal allocations, if not spent, would be taken away, she said.

Supervisors took no action Tuesday, but they directed the administration to explore all the cash available in county reserves and trust funds.

Tuesday's study session on the state budget status was the first of many such discussions expected to be held each week. Supervisors say they will take up the issue in public until the budget picture clears.

The board is expected to start formulating a plan to survive next week.

"We'll do this with full transparency, so everybody knows what's going on," Supervisor Tony Oliveira said. "We'll do it together. The labor works with us, and we'll work together."

Meanwhile, counties throughout the state are opposing the deferrals, saying there won't be any guarantee they would ever receive the money. Counties are urging the state to instead issue registered warrants or IOUs, which officials said may allow counties to access credit markets to borrow money.

Impacts of the economic woes and the state budget crisis are already being felt in neighboring counties.

Fresno County on Tuesday was expected to announce more budget cuts. Kings County's northern neighbor has also recently announced furloughs for as many as 4,000 employees to take 80 hours of unpaid leave this year.

Tulare County, on the other hand, voted three weeks ago to cut nearly 200 jobs from the county's Health and Human Services Agency, forcing a closure of health care clinics in Tulare and Lindsay.

On Tuesday, the Kern County Board of Supervisors was considering adopting its own declaration of local fiscal emergency in light of the worsening budget crisis.

Kings County has been on a hard hiring freeze since October. But so far, the county has been able to avoid layoffs. 

The reporter can be reached at 583-2429.

(Feb. 4, 2009)