Faced with of an ongoing funding shortage, San Benito County
supervisors are searching for ways to pull more revenue into county
coffers as they prepare to dig into county reserves to fill a $2.6
million budget hole.
Hollister – Faced with of an ongoing funding shortage, San Benito County supervisors are searching for ways to pull more revenue into county coffers as they prepare to dig into county reserves to fill a $2.6 million budget hole.
The problem is easy enough to understand – the county is spending more money than it is bringing in. Finding new revenue sources is the complicated part. And even after the $4.8 million deficit announced by county officials last month was whittled down to $2.6 million by cutting departmental expenditures and putting a hiring freeze on vacant positions, the county will still have to turn to its $14.5 million reserve fund to balance the books before the new fiscal year starts on July 1.
“We need to correct our revenue to expenditures ratio,” said acting Chief Administrative Officer Susan Lyons. “We have very low revenues.”
As county supervisors look for new revenue sources, they are setting their sights on countywide fees, many of which have not been increased since 1991, according to Lyons.
Because they have not been increased in more than a decade, many of the fees charged for county services, such as planning department and agricultural commission services, do not cover the cost of the service provided, Supervisor Don Marcus said.
“We need to update fees to residents to stay on par with what it is costing the county to provide services,” he said.
But even with an increase in county fees, supervisors see development of commercial and industrial business in the county as the way to ensure long-term financial stability.
“We just have to increase the job base, so people have better opportunity to make a living in San Benito County and spend money here.” Supervisor Anthony Botelho said.
To increase the job base, according to Botelho, the county will likely have to rezone agricultural land along highways so it can be used for commercial purposes and rezone land along railroads for industrial use.
“That’s the only way to rectify our budget woes, by increasing the value of our county,” he said.
Supervisor Jaime De La Cruz agrees. He wants to see more commercial businesses and even hotels come into the county, and, he said, if agricultural land needs to be rezoned to do that he would support it.
“We need to be aggressive,” he said.
The county’s 1 percent growth cap, Hollister’s sewer moratorium and a poor economy are all responsible for slow growth in the county’s revenue, which makes it easy for expenses to outpace spending, Lyons said. Also, she said, that San Benito County is among the four counties that receive the lowest return on tax dollars from the state – for every dollar San Benito County sends to Sacramento in taxes, it receives 11 cents back.
In 2003, the county generated approximately $4.4 million more than it needed to cover expenses. Last year, spending outpaced revenue by more than $6 million dollars resulting in the Board of Supervisors rolling the $4.4 million surplus from the prior year into the current budget and drawing another $1.8 million from reserves.
The county will use nearly $2 million from its $14.5 million reserve fund to balance its budget for the coming year, and the reserve is enough to carry the county for five or six years, Lyons said. But even if revenues don’t grow enough in the future, county officials want to avoid draining the reserve, which might mean county employees will be laid off.
“At this point we’re hoping not to implement layoffs,” Lyons said.
But, she said, “If we don’t start increasing revenues we will have to decrease the workforce.”
Botelho said he doesn’t like the idea of laying off county employees, but if it comes to that he will be practical and make a decision based on what he thinks is best for the county as a whole.
“I think if revenues don’t improve we really have to take a hard look at any means necessary to balance the budget,” he said.
Given that county departments are all ready light on employees, according to Marcus, lay offs may not be a real solution to the county’s financial situation.
“Right now that is our last resort,” Marcus said. “The county is really lean on personnel, so there’s not even that much there.”
Luke Roney covers politics for the Free Lance. Reach him at 831-637-5566 ext. 335 or at lr****@fr***********.com.
