State had hand in unanticipated county surplus
August 26, 2004
An embroiled California recall election that saw the immediate repeal of vehicle license fees and a late Sacramento budget agreement which protected counties from deep cuts contributed to El Dorado County’s $7.7 million budget surplus.
That’s the word from the county’s Chief Administrative Officer Laura Gill, who informed county leaders last week of the oversight.
Three factors contributed to the budget surplus of El Dorado County, Gill said. While county officials are responsible for some of the accounting errors that created the surplus, other factors appear to be out of the county’s hands.
Taking the surplus pie and cutting it into three pieces, Gill explained how the county was so far off the mark.
A third of the surplus came from state money transfers to counties such as El Dorado and much of that money wasn’t earmarked to the county until after the budget deadline.
A hike in vehicle license fees that was implemented by then former governor Gray Davis’ administration was repealed by Gov. Schwarzenegger.
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Uncertainties about the money, which wasn’t realized until spring, led many counties to give more conservative than usual estimates on how much state money they could depend on.
A last-minute budget decision by Gov. Arnold Schwarzenegger not to put the brunt of California’s deficit on the backs of California cities and counties came after many counties had already submitted their already conservative budgets, Gill said.
El Dorado County braced for the anticipated state budget cuts and those big cuts never came, Gill said.
Distribution of other Sacramento money, such as road tax funds wouldn’t be realized until after the June 30 budget deadline. Again, El Dorado County made conservative estimates on how much Sacramento would give El Dorado County and again, Sacramento gave more than anticipated.
Discretionary revenue to the tune of about $1.45 million was attributed to the surplus. Revenue projections are always on the conservative side because, like the wind, they blow in the direction of whichever way the economy is going. In El Dorado County growth in revenue sources such as sales and property taxes accounted for the increase.
Finally, a third of the surplus is attributed to conservative estimates made from the county departments over how much money they would have. Many departments underestimated their revenues and overestimated their expenditures, which meant the balances were much lower than what the departments projected to the county auditor-controller and chief administrative officer.
The county’s employee association, which says it wants some of the surplus to go toward new contract negotiations, is unhappy that about 300 of its employees had to take a 40-hour, one week leave without pay.
County supervisors have said they would have to make adjustments because of the surplus, and dealing with the county’s employee union was one area to look at.
As far as accountability is concerned, Gill said her office will take steps to assure there are proper budget firewalls within each of the departments. This includes working closely with departments so they are accountable for the estimates they provide.