County hosts forum on its economic outlook, and the view isn’t pretty

on February 17, 2011

The title of the economic forum held yesterday in downtown Oakland said it all: “The Worst Is Yet to Come.”

The forum, a repeat of one hosted by Alameda County in Fremont on Tuesday, aimed to provide an outlook on the county’s economy and illustrate potential impacts of the proposed federal and state budget cuts on the region.

The county unemployment rate is 10.8 percent, and the highest rate in the county is the city of Oakland at 16.3 percent . The assessment rolls used to assess property taxes for the upcoming fiscal year, according to analyst Kai Mander of the county administrator’s office, saw a consecutive decline in 2009 and 2010—the only negative growth since 1958.

Among a number of other downward revenue curves shown by Mander, only sales tax revenues and the county share of Measure A revenues are estimated to go up slightly.

Meanwhile, the demand for public services is soaring, Mander said. Figures show that caseloads for assistance programs, such as CalWORKs and food stamps, have been increasing dramatically in the past few years — especially in 2010 — adding additional pressure on the county’s budget.

The overall economic outlook of the county, Mander said, can be summarized as “very slow recovery, unemployment still high, home values way off peak, revenues down and demand for services high.”

The forum also explained the distribution of the county’s $2.1 billion general fund in the 2010-2011 budget. County Supervisor Wilma Chan said more than 50 percent of the money goes to health care services and public protection, while 32 percent is used on public assistance. Forty-five percent of the roughly $500 million in discretionary revenue goes to public protection, while public assistance and health care takes up 13 and 17 percent respectively.

Chan noted that among the $152.4 million in budget cuts in the county’s past fiscal year, only 30 percent will still apply this year.

In January, Governor Jerry Brown proposed a $12.4 billion cut to the state budget next year, including a $1.7 billion cut to Medi-Cal.

“Some of the proposed cuts would result in people dying,” said County Administrator Susan Muranishi. “It’s easy to look at [the budget] when it’s just numbers. It’s much harder to look at it when you really think about people.”

Muranishi said the county is very dependent on the state government for revenues and that the cuts could greatly affect health care for the over 125,000 low-income Medi-Cal recipients in Alameda County.

“The suggested caps on services and supplies; elimination of adult day care; reduction in provider payments, and new co-payments will result in a significant loss of life, care and coverage,” the county supervisors wrote in a letter to Brown expressing their concerns about his budget proposal.

The letter adds that the proposal would affect or even eliminate other health care programs such as First Five and Healthy Families, which involve tens of thousands children in the county. A preliminary analysis of budget impacts is also attached to the letter, which lists nine affected programs in total.

The governor’s proposal, said analyst Mander, also relies on voters approving a five-year extension of tax increases which were initially approved in 2009 and are set to expire this year. The extension would generate estimated more than $10 billion.

If the bailout initiatives fail in June, Mander said, further cuts would be inevitable—and education, health services and public safety would be the first to get hit.

“We expect to have to face very difficult choices,” said Muranishi, who added that the county is carefully monitoring its own spending and they’ll work on constructive alternatives to present a balanced budget in June.

“We really need advocates to continue to talk to our legislative delegation and the governor about the types of impacts that the proposed budget will have on people’s lives in this county,” she said.

To view the complete presentation, visit http://www.acgov.org/budget.htm

Photo by Basil D Soufi
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