The Great Recession might have officially ended in June, but Orange County’s top finance officials say still-sluggish tax receipts mean they’ll have to cut more than $100 million from the county budget over the next five years.
The first step is a 5 percent across-the-board cut, Bob Franz, the county’s chief financial officer, said Tuesday at the Board of Supervisors meeting.
And everything is on the table.
The menu of cuts highlighted by Franz and other officials includes the following: salary reductions; reducing premium pay; limiting step increases; instituting hiring freezes; eliminating leave payouts; and establishing incentives for people to work longer instead of retiring.
And with pension costs being the biggest driver of projected future deficits, there’s even talk of seeking legislation to change pension benefit formulas.
This was all part of a presentation of the county’s strategic plan — which was developed after the 1994 bankruptcy to give elected officials a way to plan budgets in advance.
Supervisor John Moorlach said that strategic plan has allowed officials to craft a softer landing by trimming each year incrementally. Moorlach said a five-year gap of $900 million has since been trimmed to $200 million.
But, Moorlach concluded, the county is left with difficult decisions.
County labor leaders called the presentation pure politics, delivered without notice and designed to publicly blame public sector unions for budgetary woes.
“They publicly ambushed us,” said Nick Berardino, general manager for the Orange County Employees Association.
Berardino was particularly upset the cuts are weighted heavily toward public employees and not toward the private contractors that take home big chunks of the county budget.
“The biggest public employees are a bunch of firms that are building and expanding airports,” Berardino told supervisors. “If you asked them to give up this much, you’d make a union rally look like a lawn party.”
This week county Chief Executive Tom Mauk announced that the county would seek up to 10 percent cuts in contracts in exchange for one-year extensions to contracts.
County supervisors weren’t very happy with Berardino’s public critique. Supervisor Bill Campbell responded that supervisors had themselves just seen the recommendations and this was just a starting point in the process.
Indeed, after years of cutting in increments of five percent, the county’s budget manager, Frank Kim, told supervisors: “We’ve got a range of potential impacts.”
The biggest impact will likely be felt in public safety, Kim said.
Interestingly, Berardino had no comment regarding compensation of the county’s manager and executive ranks. In the past he has railed against the fact that executives don’t contribute more to their pensions and are given things like lucrative car allowances.
That bargaining group is in the midst of closed-door negotiations.