HOLLISTER
San Benito County has under spent on its budget by around $2.6 million through the fiscal year’s first half in preparation for possible cuts from the state, a county official told supervisors this week.
“Due to spending control and hiring freezes and things we’ve done to manage our money, is we’ve established a bit of reserve funds,” said County Administrative Officer Susan Thompson. “We are still on solid ground.”
During a presentation on the mid-year budget projections Tuesday, she added that the numbers are only preliminary and county staff will be preparing a more analytical study to present to supervisors in the coming weeks.
Thompson also noted how the county has not had to freeze jobs and that some are still open to be filled.
“There is no hard freeze anticipated,” Thompson said, while contending that San Benito County has been “living with restricted means.”
“We have never had a huge sales-tax spike,” she went on. “This county has been on a flat economic situation for a long time.”
The only real increase in revenue over the last couple of years has been through property taxes and increased land values.
But even with a surplus of $2.6 million in the budget so far, those funds could decrease rapidly in the next couple of weeks. “(The surplus) does not take into account anything the state might do to us in the coming weeks,” Thompson said. “We could lose our Williamson Act funds. That would significantly affect our budget.”
Once the state budget is done, there’s a potential it might decline to immediately funnel back revenue to San Benito County. When and if that happens, she said, the county would be forced to rely on cash reserves.
“Fortunately, we do have reserves and we don’t have a cash-flow crunch,” Thompson said. “If this goes on for months, we can’t do this. Holding on for state funds is only a short-term strategy.”
If the money from the state is not forthcoming, the county will need to manage expenditures and revenues a bit tighter than in prosperous times, she said.
If it gets to that point, she said, “There is no possible way that the county can survive on their cash flow without some significant cuts down the road.”
At the moment, the county is in a good position “because our budget expenditure level, even with the budget downturn, we’re more than balanced in the budget,” Thompson said.
