‘Too much doom and gloom’

County memo outlines ‘drastic changes’ state budget cuts would cause

If all of the cuts in state spending and other budget measures Gov. Arnold Schwarzenegger has proposed in the wake of the May 19 election actually occur, Butte County will see a reduction in its total annual budget—now pegged at $391,134,918—estimated at more than $59 million, or 15 percent.

Numbers can seem cold, but the lives that will be affected—of both those who receive the services the $59 million pays for and those county employees who will lose their jobs when the services are stopped—are anything but.

As Deputy Chief Administrative Officer Sang Kim described it, during a recent phone interview, “I do numbers because that’s what I do, but in the end these are people. Most of them live on very little and rely on these services.”

The budget news was contained in an ominous-sounding public memorandum the county’s interim chief administrative officer, Greg Iturria, issued Tuesday (June 9). In carefully official language, the memo notes that such reductions “would drastically change the services Butte County provides to its residents” and “eliminate a significant number of county positions”—so many, if fact, that the county’s Human Resources department “likely … would not be able to process the layoffs in the time period required and also ensure that the county payroll is processed timely.”

“If every single proposal is carried out,” Kim said, “the county will lose hundreds of jobs.”

The memo lays out the anticipated costs of the cuts, which are huge, but its most chilling aspect is the way it coolly describes the many reductions in funding that will either cut or can services.

Most significant, the governor proposes to eliminate altogether the state’s welfare program, called CalWORKS. The state would save $1.5 billion, but it also would lose $4.1 billion in matching federal funds.

From the memo: “[T]he elimination of this program would directly impact 8,700 Butte County residents (3,500 families) along with approximately 200 county employees and would eliminate over $17 million currently coming into Butte County.…”

Compounding the problem, the memo continues, “the elimination of the [state and federally funded] CalWORKS program would likely result in increases to the [county-funded] General Assistance caseload….”

Elimination of CalWORKS also would result in the loss of $900,000 in funding for the Behavioral Health Department to provide treatment services for people moving from welfare to work.

In addition, funding for the Child Welfare and Foster Care programs would be cut by 10 percent, a reduction of $300,000 that would also cost $400,000 in federal matching funds as well as six or seven jobs. The state is also proposing to make counties responsible for 75 percent of non-federal funding of the program, which would cost the county a whopping $4.25 million.

The governor also proposes to eliminate in-home care for disabled persons with an overall functioning index score below 4, which would reduce the county’s In-Home Supportive Services caseload by 85 percent, from 3,208 to just 439.

This would reduce the amount of state and federal IHSS funding coming into the county by $29 million—money that would otherwise go to pay the salaries of about 2,800 home-care workers. In addition, as many as 26 county IHSS workers would lose their jobs.

In all, the governor’s proposals would reduce or eliminate funding for a wide range of programs. The Behavioral Health Department would be hit especially hard. In addition to the $900,000 mentioned above, it would lose funding for Substance Abuse and Crime Prevention Act programs ($400,000); youth mental-health treatment services ($800,000); participants in the Healthy Families program ($250,000); and, in the biggest blow, major reductions in the Mental Health Managed Care program ($2.3 million).

Some of these cuts relate to much greater reductions in non-county-funded programs. For example, Behavioral Health will lose $250,000 designated for participants in the Healthy Families program, the state’s version of the national Children’s Health Insurance Program. The governor is proposing to eliminate the program, and with it health insurance for more than 900,000 children—4,000 of them in Butte County—whose parents earn too much to qualify for Medi-Cal but too little to afford private health insurance.

The governor would also cut the Medi-Cal health-insurance program for low-income people in various ways—once again forsaking federal funds to save the state match.

But the most difficult cuts, at least from a financial standpoint, would be delivered to the county’s discretionary, general-fund budget. That’s the money that pays for such services as fire and police protection, probation, the district attorney, libraries, public works, development services and county administration.

The governor is proposing to invoke his right, under Proposition 1A, to “borrow” some $2 billion that would otherwise go to the counties. Butte County’s share of this would amount to about $3.5 million; it would have to be slashed from the 2009-10 budget, on top of about $15 million in reductions already instituted, including a $2.3 million reduction in the CalFire contract.

Schwarzenegger is also proposing to end the Williamson Act land-conservation subvention, at a cost to the general fund of $633,000. And he wants to permanently redirect 75 percent of gas-tax revenues from the counties to the state for debt service. For Butte County, this would mean a $3.3 million reduction in the Public Works Department budget, resulting in less road repair and maintenance and the loss of several jobs.

It’s difficult to calculate how much the reductions will cost Butte County in total, Kim said. “So many things are so intricately interconnected,” he explained. When cuts are made in one state-funded program, the result may be more people using a county-funded program instead.

The state has to show progress toward balancing its budget by June 15, or it might not be able to borrow money to avoid a cash-flow crunch in July, Kim said. The state’s deficit problems and lowest-in-the-nation credit rating are making it hard for Butte County to borrow the money it needs to pay bills, too.

“When people ask me to describe government in California, the word I use is ‘dysfunction,’ ” Kim said. The silver lining in this fiscal crisis is that it “provides a good opportunity to restructure and to change things.”

Unfortunately, Kim added, he has no confidence in the Legislature’s ability to do that.

In the meantime, all county officials can do is wait to see just how much money the state cuts from the county’s budget and go from there. When Iturria read his memo to county supervisors at their meeting Tuesday, they didn’t want to talk about it. It had “too much doom and gloom,” Kim said.