The Santa Clara County Board of Supervisors has unanimously approved modifications to the proposed budget recommendations for the 2012 fiscal year.
The board is expected to take final actions to adopt the 2012 budget on Friday.
In May, Santa Clara County Executive Jeff Smith recommended a budget that addresses a $219.6 million deficit in the county's general fund through program and service cuts, use of one-time revenue and layoffs.
Since then, Smith said sales tax revenue has increased, but that the economic outlook for the county otherwise remains bleak, with the budget being balanced on the assumption of $75 million in general fund savings from labor agreements that have not yet been completed.
Moreover, the implementation of a local hospital fee, which would add $7 million to the general fund, as well as the extension of a vehicle license fee tax, remains uncertain. The county is depending on generating at least $17 million from the vehicle license fee.
The impact of the state and federal budgets also remain unclear, and contributing to the list of concerns is the county's cash flow and limited cash reserve, Smith said.
Smith recommended that all new funds be placed in reserves to allow for some flexibility in the budget.
He recommended that $7 million be reserved on an ongoing basis for a local hospital fee, to offset the loss of revenue in the event that the fee is not implemented next year.
Smith recommended a one-time, six-months reserve of $8.5 million to compensate for the loss of the vehicle license fee, which public safety staff and the probation department rely upon.
Because the impact of the state budget is unforeseeable, Smith proposed setting aside $5.5 million to meet the potential impacts of the state budget on the county.
Finally, Smith recommended allocating $1.4 million to a cash reserve fund, which has been empty since the board adopted an ordinance in January to establish the reserve.
Bay City News