Orange County Expects Improved FY 2021-22 Budget, Spending $7.7 Billion

Wednesday, June 02, 2021

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(Orange County Register)

Orange County’s financial condition is much less dire than some feared it would be when the coronavirus pandemic shut down businesses, schools, and even some government services for months starting early last year.

County supervisors will vote in June on a budget for fiscal year 2021-22 that would spend $7.7 billion, just a little less than where this year’s spending is expected to end up, at $7.9 billion.

OC’s fiscal position is relatively healthy in part because the county had the tools already in place to be proactive, Chief Financial Officer Michelle Aguirre said. Once the pandemic hit last year, they put a freeze on hiring and unnecessary spending, and they offered an incentive program for people to retire or quit.

More than $500 million in federal coronavirus aid received last year also helped, as will two payments of $308 million to be received this year and next from a 2021 aid package. Budget officials remain concerned about reimbursement from the Federal Emergency Management Agency for ongoing COVID-19 costs, such as vaccine clinics. Aguirre said they’ve submitted claims for $200 million in money that’s already out the door, but the process is slow and they’d only gotten about $18 million back as of mid-May.

In the proposed spending plan, the largest budget area – community services (which includes the health care agency, social services and animal care) – would shrink by more than 13% to about $3 billion. Aguirre said that’s partly because much of the 2020 CARES Act funding pumped up the community services budget, but money from the 2021 aid bill was stashed in a placeholder category until the county gets more detailed guidelines on how it can be spent.

Public protection is the second-largest spending category, including the Sheriff’s Department and District Attorney’s and Public Defender’s offices. The total there would increase by 1.4% to $1.7 billion.

“We’re not asking for new things. It’s just the growth in salary and benefit costs and the cost of doing business,” said Brian Wayt, executive director of the Sheriff’s administrative services division.

“This budget is allowing us to maintain our current level of service.”

County CEO Frank Kim is recommending the Sheriff’s Department get about $16 million less than Sheriff Don Barnes requested, and Wayt said Barnes may have to come back and ask for that money later in the year, a past practice some have criticized as overspending. Wayt disputed that characterization and said the budget is an estimate with assumptions about revenue, vacant positions and other factors that don’t always match forecasts.

Two county supervisors said as they head into a June hearing on the proposed budget, they’ll be looking to see how the spending plan bolsters a community still trying to get back on its feet after a devastating pandemic.

“The bottom line is this is a year to sort of pause a little bit, but really focus intentionally on prioritizing anything that supports local businesses, anything that supports after-school programming and child care so families can get back to work,” District 2 Supervisor Katrina Foley said.

“We’re a service organization and right now more than ever, people need services.”

Foley said she’d also like to see the county replenish its emergency reserves, some of which it spent during the pandemic, hire attorneys to ease caseloads in the district attorney and public defender departments, and create a strategy to help match workers with jobs.

“There are a lot of people that are still hurting,” District 3 Supervisor Don Wagner said, so he’ll be looking at how the budget helps them. He’d also like to see the reserves built back up, but he wants to make sure they’ve created a sustainable plan and aren’t just relying on one-time infusions of federal aid.

Officials had worried the impacts of COVID-19 would lay waste to the county’s revenues, “and yet we’re looking at a better budget – why is that,” Wagner said.

Orange County supervisors will hold a public hearing on the budget June 8.

Category: orange county, Economic News, COVID-19