Budget Update

By Bruce McPherson, Supervisor 5th District

Since the recession of 2008-09, the County has faced significant budget problems that were managed through employee layoffs, mandatory furloughs, retirement benefit changes, not filling vacant positions, and a reduction in some levels of service provided to the community. The County also drew upon fund balances to soften the downward spiral caused by the reduction in revenues, primarily in property tax revenue.

As we head into budget deliberations in June, there are noticeable improvements. Revenues are slowly improving, although they have not recovered to a degree that the County’s expenditures and revenues are balanced. As a result, we will continue to rely on fund balances to address the shortfall. However, we need to start rebuilding our reserves to erase our “structural deficit” in the budget.

Of the $103 million net County cost of operations, public protection continues to dominate the use of the County’s funds, comprising 60 percent of the budget.

This year’s budget focuses on the restoration of furlough hours sustained by employees since 2009-10 and on restoring services. I’m particularly pleased that we will be able to add more Sheriff’s patrol deputies. The Sheriff’s proposed budget is primarily focused on rebuilding service capacity. Four deputy sheriff positions that were previously unfunded within the patrol section have been recommended to be filled. In addition, three new criminalist positions are being added in the investigations section, which allows the two deputies and sergeant currently in those positions to return to patrol work, for a total of seven additional deputies out on patrol.

As the representative of the Board of Supervisors to the California State Association of Counties (CSAC) Board of Directors, I have been a leader in the effort to have the State pay back counties for so-called “unfunded mandates.” These state “mandates,” which were imposed on our 58 counties prior to 2004, amount to $900 million that is owed to counties, cities, and special districts.

Of that $900 million, $600 million is owed to counties throughout California and, more specifically, $10.6 million to Santa Cruz County. I was pleased when Gov. Jerry Brown included $100 million of that total to be paid back in his 2014-15 “May Revise” proposed budget, with the balance to the paid off in the following two budget years. Unfortunately, neither the State Senate nor Assembly Budget Subcommittees included Gov. Brown’s budget suggestion.

It will be difficult to get the unfunded mandate proposal back into the 2014-15 budget, but through our elected State representatives and many of their colleagues we are hopeful that this issue may be included in the State’s final budget bill. I am confident those funds would be well (better) spent by a government that is closer to home.

Ban on Fracking

Our Board of Supervisors recently voted unanimously for Santa Cruz to be the first county in California to ban hydraulic fracturing. “Fracking,” as it is commonly referred, is a drilling technique that involves pumping large amounts water mixed with chemicals into the ground to break open rocks and “release” the oil and gas contained within. Advances in this technique have resulted in new drilling in areas where it was once considered uneconomical to drill. However, there are many potential problems, including contamination of groundwater supplies.

Our vote was largely symbolic in that there are no known oil leases in Santa Cruz County and it’s unlikely that the county is being targeted for oil development. However, the Monterey Shale Formation, and other rocks potentially containing oil and gas resources, underlies much of the County of Santa Cruz. Although no active production of oil or gas resource currently takes place in our county, technically feasible and economically viable approaches may be discovered by the oil industry to tap potential accumulations of oil and gas resources in the Monterey formation or other rocks containing oil and gas resources, and interest could turn from the developed resource areas in southern California to other parts of the state, including Santa Cruz County.

The U.S. Energy Information Agency previously estimated that the formation held nearly 14 billion barrels of untapped oil. However, the agency has since downgraded its potential to 600 million barrels.

Even if no oil development is done soon, my hope is that this action will protect our community for generations to come.