Kings County: No one will be spared

Already hit by cuts, Kings County as well as area cities will likely face new, deep slashes in public spending after California voters nixed a package of measures designed to reduce the massive budget deficit through taxes, loans and fund shifting.

More than 60 percent of voters rejected five fiscal measures on the ballot in Tuesday's special election, although a sixth measure barring pay raises for state officials amid deficits was approved.

Deep cuts would have been likely anyway, as the referenda would have only lowered the deficit by $6 billion.

With measures rejected, California now faces a $21.3 billion budget gap.

In the wake of the election, county officials expect even deeper cuts to services, such as mental health and health and human services.

"The impact to Kings County will most likely mean ... some severe cuts," Deb West, assistant county administrative officer, said in her preliminary assessment of the situation.

First, the emergency clause in Proposition 1A passed in 2004, which was intended to protect local government revenues from the state, will most likely be triggered now, allowing the state to borrow up to 8 percent of property taxes collected by local governments, West said.

For Kings County, that would mean a one-time loss of $2.5 million-$3.2 million in discretionary funds.

The county also expects the Williamson Act, a program that gives a property tax break to farmers who agree to keep their lands in agricultural production, will likely be on the chopping block once again. The program reimburses the county for lost property tax revenues. For Kings County, that is $2.4 million , West said.

"In addition, there are literally billions of dollars in cuts that the state's looking to make across the board," West said. "We aren't clear yet as to how that might impact Kings County specifically. But we know there are going to be further cuts."

Officials are especially concerned about the cuts in health and human services, calling the anticipated cuts in social services a "double whammy."

"In a time when we've got more people needing help because of the economy, we're going to have fewer resources to help them," West said.

Mental health services will also likely face "significant cuts," but an exact budgetary impact will still need to be figured out.

On June 2, County Administrative Officer Larry Spikes is scheduled to update the Board of Supervisors on the budget and propose the use of a reserve fund to supplement the property tax revenues expected to be transferred to the state. Because the state is supposed to pay back the money plus interest in three years, it's considered an appropriate use of the rainy day money, West said.

"California is at a crossroads," West said. "We can't continue as business as usual. There will be a major change in the way governments are run. This will reset the base across the board, and that base will be a much lower base than what it is now."

Meanwhile, the impacts on cities remained unclear.

Neither the Hanford city manager nor the Lemoore city manager was available Wednesday to discuss the potential impact of the election results on city budgets for next year.

Hanford City Public Works Director Lou Camara did say that his department -- the largest department within the city -- will face "significant cutbacks" in the next fiscal year, but he deferred to City Manager Gary Misenhimer for specific figures. Misenhimer is expected to discuss the proposed budget at the next City Council meeting on June 2.

Frustration was palpable, as Corcoran City Manager Ron Hoggard gave his reaction to the state budget crisis that seems to deepen.

"We have made some cuts already based on the economy, and then to have the state to come in and borrow from us, we're getting hit twice. The citizens of Corcoran are hit twice," Hoggard said of the likelihood that the state would borrow local tax revenues this year to fill its needs. "We do have cash flow to take care of these things, but the state not being responsible is no justification for coming in and taking our money, because we are being responsible."

As it remains uncertain whether the state would actually do that or whether that would be enough, Hoggard said the city will have to examine ways to cut more costs through measures, such as negotiating reductions in health and retirement benefits with unions. He said he will avoid layoffs as much as possible.

"Our employees also support the economy, so you want to keep as many employees here and other parts of the economy working and spending money and help sustain the economy," Hoggard said. "Layoffs will further erode the ability for the economy to spring back."

The reporter can be reached at 583-2429.

(May 21, 2009)