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Santa Clara County Re-balances Budget to Address Shortfall caused by State, Feds, and Local Economy

Phase II Eliminates 114 Positions Signaling Serious Challenges in the Year Ahead

COUNTY OF SANTA CLARA, CALIF.—Today the County of Santa Clara Board of Supervisors, approved several recommendations of County Executive Jeffrey V. Smith, to address a current shortfall of $55 million in the County’s Fiscal Year 2011 budget. This action completes a series of budget-rebalancing steps begun in December. It does not reflect current proposals by Governor Jerry Brown which have not yet been acted on by the state legislature.

The meeting started on a sobering note.“We have some very difficult times ahead of us,” said Smith. “Last June, the Board reduced $230.8 million from the base budget. Even if the Board approves all of the proposals today, this current budget will be balanced, but in July, when the new fiscal year starts, we still will be facing a $200+ million deficit for 2012.”

Smith was referring to the structural budget deficit that has plagued counties for the past several years. When the economy is strong, county governments receive more property and sales tax revenue. When the economy goes sour, more people need county aid because they lose their jobs, and/or health insurance. At the same time, when the demand for service is greatest, tax revenues are less, creating a structural imbalance.

Prior Action
The County of Santa Clara’s overall General Fund Budget for Fiscal Year 2011 is $2.1 billion. In December, the Board of Supervisors approved Phase I of the plan to address the $55 million shortfall.

Phase I included a number of reductions proposed by County departments in response to targets given by the County Executive. It also included moving forward with the elimination of six vacant positions. Those actions allowed the County to begin capturing savings right away, as the Administration continued to review the impacts on County service which would result from the remaining proposed reductions.

The proposal specifically called for changes in the way the County operates or captures revenue from other sources. The plan anticipated generating revenue valued at $14 million and decreasing expenses by $10 million.

Today’s Action
The Phase II action taken by the Board of Supervisors today eliminates another 114.2 positions, all of those recommended by the County Executive except two full time equivalents in the Public Guardian’s Office, and 2.6 nurses in the Neonatal Intensive Care Unit. The majority of the employees in those positions may be moved to other jobs, sometimes at a lower pay rate. About 31 employees will be laid off. The cost savings for the personnel reductions is projected to be $9.1 million.

Supervisors Ken Yeager and George Shirakawa made the initial recommendation that the Deputy Public Guardian and the Estate Administrator Assistant positions be retained. The Board supported the change. Supervisor Kniss directed staff to monitor the number of patients in the Neonatal Intensive Care Unit and the severity of their medical condition during the next four weeks to refine the census and related nurse staffing, prior to layoffs.

Supervisor Mike Wasserman summed up his sentiments about the difficult decisions ahead. “It’s going to take teamwork to find solutions that do more than shift existing resources around,” he said speaking to his colleagues and those in audience. “We’ll need to rise above self-interests and focus on the common goal of effectively delivering services to our residents.”

Media Contact: Gwendolyn Mitchell/Laurel Anderson, Office of Public Affairs (408) 299-5119
Posted: January 25, 2011