County Budget Shows Signs of Recovery

Expressing optimism about Los Angeles County’s fiscal future, Chief Administrative Officer David Janssen presented a proposed annual budget Monday that for the first time since a 1995 brush with bankruptcy would not require cuts in services and jobs to close a projected deficit.

The $13.2-billion spending blueprint--a whopping 5.3% larger than last year’s annual spending plan--actually restores a few critical services for the first time in years, thanks to an influx in state and federal moneys. It even provides a meager $19 million for long-neglected improvements to county buildings, computer systems and vehicles and for expanded services to the 1 million people living in the unincorporated areas of the nation’s largest county.

But what is so remarkable about the “good-news” spending plan, Janssen’s bosses on the Board of Supervisors said Monday, is that it comes so soon after the fiscal meltdown that threatened the county’s very solvency.

A projected $1-billion deficit in 1995 led Janssen’s predecessor, Sally Reed, to call for the closing of the mammoth County-USC Medical Center and eventually to the elimination of thousands of jobs and scores of important government programs.

A majority of the county’s five elected supervisors indicated that they will approve Janssen’s plan within weeks with few if any changes. The transformation of the county’s financial picture, some said, is nothing short of a miracle.

“This budget is a remarkable development,” said Supervisor Zev Yaroslavsky. “If you had told me three years ago that we would be in the black . . . I would have said you needed your head examined. As painful as it has been, it is a remarkable story. We have come through the most precarious time in L.A. County’s financial history.”

Janssen attributed the turnaround to a combination of hard choices made by the supervisors, to more money from Sacramento and Washington--thanks in part to a better-organized county lobbying campaign--and even to cooperation and concessions from the county’s powerful labor unions.

Even county labor leader Annelle Grajeda praised the budget as fair, after years of contentious disputes between her union--Service Employees International Union Local 660--and the county over job layoffs and service cuts.

The county’s top fiscal officer warned, however, that the supervisors would be making a major mistake if they use their newfound financial stability as an excuse to fund pet programs and restore too many services and jobs in the once-bloated government bureaucracy.

By 2001, for instance, the county will no longer have the option of taking as much as $300 million a year in excess pension fund earnings to patch over a gap between what the county spends each year and what it takes in from taxes and from state and federal government transfers.

As a result, Janssen has built into his financial blueprint an escalating series of annual contributions to that pension fund, which are designed to slowly wean the supervisors off of their reliance on the money.

Included in this year’s proposed contribution is about $30 million that the county has to pay to begin penciling out a $1.2-billion unanticipated pension fund liability that came to light recently.

“It is something we can’t walk away from,” Supervisor Don Knabe said of the liability. “We have to take responsibility for it.”

In two years, the county will lose its annual influx of hundreds of millions in federal health care dollars that President Clinton promised in the heat of his reelection campaign.

And there is a third financial liability that looms darkly in the county’s future: more than $200 million in much-needed maintenance and capital improvements to government buildings that have been deferred year after year, as the supervisors struggled with more immediate concerns.

Many of the county buildings have been neglected for so long that some have become safety hazards. Janssen has proposed spending $10 million on capital improvements in the upcoming fiscal year, which begins July 1. But that, he conceded, is only “a drop in the bucket” given the 57 million square feet of county office space.

Janssen also proposed spending $3 million to replace county vehicles, many of which also are in dangerous states of disrepair.

Knabe said he will vote to support Janssen’s calls for continued fiscal restraint, as did Yaroslavsky and Supervisor Gloria Molina.

The budget does, however, include a list of new programs that are designed to in part restore some of the cuts made since 1995.

It also provides an increase of 2,500 employees, although Janssen said Monday that, thanks to an improved economy, it does not rely on any of the assumptions that got supervisors into fiscal hot water in recent years, such as voter approval of special taxes and state funding for welfare and probation programs.

Hundreds of workers will be hired to help the Department of Public Social Services overhaul its welfare programs. And more than $10 million will be spent on mental health programs for troubled children in the county’s care. An additional $24 million will go toward improved mental health services in the jails because of pressure from the U.S. Department of Justice.

Janssen has proposed spending $6 million to restore services in the unincorporated areas. Among them: 14 positions for new recreational programs for children; nine more animal control officers; five code enforcement officers to fight blight, and $400,000 for library books.

An additional $2.9 million would be used to hire 82 deputy sheriffs to continue a popular community policing program in the unincorporated areas. And 32 probation officers will be added to ease caseloads and enforce ex-convicts’ parole conditions.

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County Budget Highlights

The $13.2-billion county budget proposed by Chief Administrative Officer David Janssen is the first since the county’s near-bankruptcy in 1995 to include some new positions and new programs. Most of the significant increases are offset by state and federal revenues and grants. Some key expenditures:

* $424.9 million for the Department of Public Social Services for new CalWorks welfare reform program.

* $58.9 million in mental health funds to expand services at MacLaren Children’s Center and managed care programs.

* $30 million in additional welfare benefits to satisfy a court order stemming from a lawsuit filed against the county for illegally cutting General Relief payments in the mid-1990s.

* $24 million for improved mental health services in jails as part of an agreement with the U.S. Justice Department.

* $15.4 million for the Probation Department, including early intervention programs, case tracking system and residential case management.

* $13 million for improvements to county buildings and for buying new county vehicles and computers.

* $6 million in new services for the 1 million residents in unincorporated areas, including 14 positions for new park recreational programs for children, nine more animal control officers, five code enforcement officers and $400,000 for library books.

* $2.5 million for the district attorney’s office to counter welfare fraud, sexually violent predators, violence against women and child abduction.