Why Did Orange County Lose $48 Million in State Funds?


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We have read in this blog and elsewhere that the State budget this year deleted $48 million that had been earmarked to come to Orange County as part of a long-term state strategy associated with the County bankruptcy.  In spite of the Supervisors’ attestations back in the 90’s when bankruptcy was filed and a work out plan was being developed that no state bailout finds would be sought, this $48 million per year was built into the annual State budget strategy to help the County, and the County has counted on that money each year.

But this year that money got cut out. County Supervisors and the Executive Office sounded an alarm of shock and dismay. The recently approved county budget had assumed that money would be there, and this State action blew a big hole in that budget.  Efforts to crash through special legislation this summer to restore that money failed.  Thus the hole remains.

So, how and why did this happen to our beloved County government?  Here are a few of the possible reasons:

  1. The State’s overall dire budget situation forced the State to leave no stone unturned in a search for money.
  2. The fact that per news reports our county was handing out “lavish” raises of up to 30% to at least some of its top managers – communicating an attitude of imprudence and arrogance.
  3. The fact that after the June County budget hearings one or more Board members bragged publicly and was quoted in the press bragging about how well the county is run, how the budget did not have to tap reserves but actually increased County reserves. Again communicating a bit of arrogance.
  4. The reality that Orange County’s legislative delegation (our State Assemblymen and State Senators) in Sacramento have no clout and can be run over.

Will the Supervisors slash the County budget to cover this shortfall, or do they have enough reserves stashed away to handle it? What about next year?  And, what about reports that the revenue flowing into Sacramento is below the level estimated in the State budget and that will trigger mid-year State budget cuts, some of which will trickle down to the counties, thereby making Orange County’s budget hole even bigger?

Then there is the shift of state prison inmates to the counties. Sure, there is a promise of funding to pay the counties for the increased cost, but no one should make a bet that funding will be adequate, much less there at all.

You can anticipate attempts at across-the-board budget cuts in County government, effort to get the labor unions to grant concessions to cover at least part of the budget hole, and perhaps even some smoke and mirrors.  The Supervisors are in for some tough public policy making.


About Over But Not Out

A retired Orange County employee, and moderate Republican. The editor seriously does not know OBNO's identity as did not the former editor, but his point of view is obviously interesting and valued.