Across the board spending cuts for Riverside County

Riverside County Chief Executive Office Jay Orr is slated today to brief the Board of Supervisors on the need for across-the-board spending cuts to prepare for less revenue and greater commitments for mandated
services.

In a statement added to the board’s agenda, Orr signaled that austerity planning was the order of the day as “discretionary revenues are softening” and budget-busting expenses are mounting heading into fiscal year 2017-18.

“The most significant and unexpected cost issue we confront remains the state’s proposed shift of responsibility for In-Home Supportive Services back to the county,” the CEO said.

Though Gov. Jerry Brown and majority party leaders in the Legislature haven’t made it unequivocally clear that IHSS costs will be fully borne by counties, all indications make a worst-case scenario likely, Orr said.

“We are braced for a … scenario in which the county absorbs $37 million in additional net cost,” he wrote.

In view of that likelihood, Orr said the Executive Office was directing most departments to prepare for a straight 6.5 percent chop in general fund support going into 2017-18.

IHSS is a Medi-Cal program that provides direct assistance to low-income seniors and the disabled who are living independently, including meal preparation, bathing, medication dispensation and other on-site care.

The governor stated in his January budget proposal that IHSS costs, due to growing recipient demand and higher labor expenses, had ballooned beyond appropriations limits established four years ago, adding to the state deficit.

The California Department of Finance recommended realigning IHSS costs, making counties responsible for the lion’s share, and Brown agreed.

According to county officials, IHSS caseload growth is averaging 13 percent per year. By 2023, the county could be on the hook for a total $165 million in additional IHSS expenses, officials said.

“With projected IHSS costs continuing to increase substantially each year throughout our five-year planning horizon … funding those increases will absorb most expected revenue growth,” Orr said.

Other matters weighing on next year’s finances include escalating internal service costs and insurance premiums, according to the executive officer.

He said sales and property tax revenue projections are pointing to a flattening of the yield curve, meaning lower receipts, while at the same time pension and labor costs are spiking higher.

To avoid digging deeper into reserves and risk breaking the board- mandated minimum of $150 million in rainy day money, the only option is to enact spending cuts, Orr said.

“Service demands have and will continue to grow, now and into the future,” he wrote. “Without doubt, a 6.5 percent cut will be difficult for some departments to absorb.”