Santa Clara Co. Budget Gets Rubber Stamp

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    NEWSLETTERS

    TK

    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