Merced County budget: Job cuts, eliminated positions cast shadow over $684M spending plan
A proposed $684 million 2020-21 Merced County budget was adopted Tuesday by the Board of Supervisors, but not without concerned words from officials distraught over tough calls made due to the coronavirus pandemic’s impacts on the local economy.
Among those tough calls was the decision to cut eight occupied jobs, plus eliminate 70 vacant jobs.
“I can say out of six years of representing here as a supervisor, this is the hardest vote that I’ve ever had to vote on,” said Supervisor Daron McDaniel. “This was tough, but I think we’ve got tougher votes coming ahead,” he later added.
Lost revenues from pandemic-related closures limited funds available from local and state sources, leading to difficult recommendations in the proposed budget and possibly more down the road, County CEO Jim Brown said.
For example, May sales tax is down 9% compared to the same period in 2019, he reported. Statewide, its 20%.
“We felt the prudent and fiscally responsible action is to move forward with beginning to reduce expenses as soon as possible,” Brown said. “After much thought and consideration, the proposed budget does include an initial phase of position reductions. This was not an easy decision.”
More on position cuts
July 19 is the last day for the eight county employees who lost their jobs. Brown said the county will work with affected staff to the extent feasible to find position alternatives.
The eight staff cuts include jobs with the County Executive Office, Treasurer and Tax Collector, Administrative Services, Public Works Administration, Spring Fair, District Attorney and Agricultural Commissioner. The eight job cuts, plus the 70 eliminated vacant positions, is expected to save the county a total of $1.8 million.
“These are people’s livelihoods that you’re affecting, and just know that it’s not personal to any one of those people,” said Supervisor Scott Silveira. “But at the end of the day, I’m tasked with trying to make . . . the best decisions possible for the long term success and viability of our county, and I think that we did that here today.”
Supervisors Lee Lor and Rodrigo Espinoza voted against eliminating the eight filled positions, but the agenda item still passed with a majority vote.
Further position reductions later on are possible, Brown said.
More on the budget
The total 2020-21 budget, which operates as a temporary plan until the budget is finalized in September, is an increase of $10 million from the prior fiscal year. The general fund accounts for $531.4 million, up from $513.9 million.
Much of the increase is attributed to $7 million for the county’s homeless navigation center, as well as increased County Public Health programs and revenues for Health and Human Services programs.
Health and Human services makes up the biggest chunk of both the total budget and the general fund, at 50% and 61% respectively.
General fund expenditures are projected to exceed revenues, partly due to COVID-19 costs and revenue reductions amid state-mandated closures. The revenue balance available for the general fund is down $5.4 million from the previous fiscal year.
The projected general fund balance is budgeted at $35 million, with approximately $4.4 million in one time adjustments needed to balance the fiscal year 2020‐21 budget.
The county projects an $8 million deficit for the general fund for the end of fiscal year 2019-20, county staff reported. A streak of revenues superseding expenditures started in fiscal year 2012-13 and ended with the 2018-19 fiscal year. In 2018-19 the deficit was $2 million.
Because of uncertainty over how significantly the pandemic will continue to impact the economy, Brown urged supervisors to think about the budget in terms of at least a two years ahead. There is no way of knowing how deep or lasting the impacts may be, he said.
This story was originally published June 17, 2020 at 7:25 PM.
