L.A. County Outlook
April 19, 2010
Reflecting the hardships of the prolonged recession, Los Angeles County Chief Executive Officer William T Fujioka unveiled a proposed budget Monday that attempts to close a $510-million deficit by cutting labor costs, reducing some services and dipping into reserves set aside during better times.
The measures suggested by Fujioka, however, are far less severe than those being pursued by other local governments, including the City of Los Angeles, where officials have proposed sweeping cuts in services and jobs to avert a full-blown financial crisis.
“The County of Los Angeles is still in a very, very strong position,” said Fujioka, who credited prudent budgeting by the five-member Board of Supervisors.
Fujioka’s $22.7 billion budget for fiscal year 2010-2011 proposes a combination of departmental cutbacks that include the elimination 1,374 budgeted but unfilled jobs. Fujioka proposes withdrawing $167 million from reserves, one dubbed the “rainy day fund.” He predicted that actual layoffs would likely number less than 100, thanks in part to an agreement last year with unions that provided for two-year contracts with no additional cost-of-living raises.
That said, Fujioka said his office is still negotiating with labor representatives to find another $115 million in cuts. He declined to provide specifics.
Given early but encouraging signs of an economic rebound, Fujioka said during a meeting with reporters and county officials that next year’s $22.7 billion budget, which is 3.7 percent less than this year, could represent the leanest of all.
“We’re predicting that next year will be the most difficult [of the past three] for the county,” he said.
Deep recessions undermine county finances by reducing local tax revenues and state funding while raising demand for vital welfare and health care services for the county’s neediest residents, whose numbers climb in tough economic times.
Here are some of the highlights of the CEO’s spending plan:
• The Sheriff’s Department would absorb a predicted $128 million cutback, resulting in the elimination of 300 budgeted but vacant positions and a reduction of overtime spending that has put the department’s brass—including Sheriff Lee Baca—back in patrol cars. The District Attorney’s Office could lose up to 25 unfilled positions and face a spending reduction of $7.9 million.
• The Health Services Department would face a $362.4 million cut, although the CEO’s office and the department have yet to say where those reductions would be found.
• Public libraries would see reduced hours at some branches as they absorbed a $4.5 million budget cut. Also eliminated would be adult-literacy programs.
• Total budgeted county employment would drop from 101,113 to 99,736.
• County welfare spending would climb, including a predicted 12.6 percent hike in residents who request General Relief, the stop-gap welfare payment of $221 per month for the county’s neediest residents. The caseload for In-Home Supportive Services, a state funded program to help the elderly and infirm stay in their homes, would grow by 5.5 percent, according to budget assumptions, and the CalWORKS assistance program, helping families with children, would grow by $151.7 million.
The unveiling of the budget is the first step in a long process that includes Board of Supervisors hearings in early May and adoption in June.
Even after the new fiscal year begins July 1, budgets will have to shift as the uncertainties of projected revenue estimates give way to the sometimes harder realities of actual tax collection and funding from state and federal sources. In fact, the budget is not fully finalized until September.
What’s more, substantial revisions could occur because of revenue assumptions used by Fujioka and his budget team. They made the calculation, for example, that property tax receipts would drop by 2 percent for the year, although the Assessor’s Office predicted a drop of 2.7 percent. The budget also assumes that Congress will come through with $40 million in federal matching funds for health-care programs.
And then there are the uncertainties of Sacramento.
Fujioka said that Gov. Arnold Schwarzenegger’s proposed state budget would slash $1.5 billion from the county, if passed untouched. But the CEO said that won’t happen. He suspects that the final state budget could, indeed, create more financial problems for the county but that it’s too early to know how severely. Fujioka said that’s why he did not factor any possible Sacramento cuts into his proposed budget.
February 2, 2010
L.A. County officials Tuesday criticized ongoing plans in Sacramento to trim the state prisons’ population and costs by shifting the care of thousands of former inmates to the county.
Department of Mental Health Director Marvin J. Southard ticked off a series of costly and potentially disruptive effects on county mental health care during the Board of Supervisors weekly meeting. In the earliest stages of the shift, Southard said, the county could end up shouldering anywhere between $8 million to $24 million.
Southard described three groups of inmates and parolees for whom the county could assume responsibility for their mental health care. They are:
- An estimated 1,200 parolees, already residing in L.A. County, whose state-based mental health treatment is about to disappear, throwing them on the county services.
- An unknown number of mentally ill inmates still in state prison who may be released in upcoming months as the state struggles to meet court orders to cut overcrowding in the 168,000 inmate system. This group is particularly worrisome to county officials because it’s expected to be large and coming directly from prison with their needs unclear. For now, a court has stayed their release.
- State mental hospital patients confined because they were judged insane or unfit to stand trial. So far, in the last year, only a small number have been sent to county hospitals as part of a release program. Some of those individuals, Southard said, have been taken to county hospitals in “midnight drop-offs,” an unacceptable practice that he said has been rectified.
The 1,200 new patients will add about 3 percent to the county’s mental health outpatient caseload, Southard said in an interview following the supervisors’ meeting. “It’s an additional 1,200 people added to an already rising patient population when resources are declining,” Southard said.
Supervisor Michael D. Antonovich, who led the questioning of Southard, called it “bizarre” and “irresponsible” that the state would force the county to provide mental health care for these individuals in difficult economic times without providing funding.
The shift of the parolees to county services is the byproduct of a plan that went into effect in late January to reduce the state’s prison population. Reclassifying more than 7,000 individuals to “Non-Revocable Parole” allows the state to reduce parolee supervision and shift care from Parole Outpatient Clinics, funded by the state, to county facilities.
The plan brought strong reactions from county officials.
County CEO William T Fujioka, for one, said the additional burden on the county amounted to an “unfunded mandate”—an all-too-common practice of the state requiring programs for which it will not pay.
State officials argue that the parolees they will reclassify—as well as prisoners scheduled for release—are non-violent offenders who pose little risk to the community. Matthew Cate, secretary of the California Department of Corrections and Rehabilitations, has said that the state could save as much as $500 million a year by lowering probation costs and providing earlier releases for some inmates.
Complicating the financial issues is a federal court order requiring California to dramatically reduce the prison population. The order arises from a federal lawsuit showing that inadequacies of the prison health care system violated inmates’ constitutional rights in the over-crowded institutions.
State prison officials promise to assist the county with the paperwork and referrals. But Southard said after the meeting that, despite good intentions, getting help is tough when “the state is in a shambles” because of retirements, furloughs and cutbacks. “They’re trying their best, but just scheduling meetings with people at the state who know the situation is difficult.”
New County Counsel Andrea Sheridan Ordin told supervisors that “the lack of coordination I think is one of the most disturbing portions of this at the moment.” She promised to look at “all types of [legal] remedies” to increase coordination and communication with the state.
January 25, 2010
The Los Angeles County Board of Supervisors will be asked on Tuesday, Jan. 26, to designate the entire county as an economically-distressed “recovery zone,” paving the way for it to issue hundreds of millions of dollars’ worth of bonds to fund an array of projects under the American Recovery and Reinvestment Act (ARRA.)
The county is seeking to take advantage of a massive U.S. Treasury Department program that has allocated $25 billion to help state and local governments across the nation get projects moving in areas that have been hit hard by job losses. Los Angeles County’s allocation is nearly $181 million in economic development bonds and $271.5 million facility bonds, which can be made available to private entities for projects in the recovery zone.
To support the case for a countywide recovery zone designation, county analysts pored over economic data and found that more than 83% of Los Angeles County census tracts have “directly experienced significant levels of poverty, unemployment, home foreclosures, or general distress,” according to a letter to supervisors from the Chief Executive Office.
Since the rest of the county falls within an average worker’s 31-minute commuting range, that means all areas of the county have a “reciprocal impact” on each other and should be included in the designation, the letter said. The countywide designation would also give supervisors more flexibility in coming up with a final list of projects to be funded with the bonds.
The only project specifically mentioned in the board letter is the Martin Luther King Jr. Multi-Service Ambulatory Care Center. The CEO’s office said it has identified more than $1.1 billion in project proposals that meet the basic bond criteria—far more than the county’s bond allocation could cover. It currently is working with each supervisor’s office to develop a priority list of projects to be funded. The final list must be compiled by Aug. 15, 2010, and the bonds issued by Dec. 31, 2010.
The recovery zone economic development bonds come with a federal subsidy covering 45% of the interest. There is no federal subsidy with the facility bonds, which are tax-exempt and can be issued by the county and the funds loaned to private borrowers developing projects within the recovery zone.
The county also is authorized to issue $27,312,584 in Qualified Energy Conservation Bonds for energy-reducing or renewable energy projects in public governmental projects, with an additional $11,705,393 allocated to bonds for such projects in the private sector.
[Updated 1/26/10]: The supervisors, at their weekly meeting, approved the “recovery zone” designation. The CEO’s office will prepare quarterly briefings for the board on the project’s progress.
January 13, 2010
Gov. Arnold Schwarzenegger’s latest budget proposal, which would deliver another round of deep cuts to social welfare and health programs, drew the ire of the Los Angeles County Board of Supervisors on Tuesday. First District Supervisor Gloria Molina, for one, called the proposed cuts “terrifying.”
The supervisors pledged cooperation with the governor and Legislature on the 2010-11 state budget to ease the pain as much as possible. But they were clear in calling on Sacramento to begin making systematic fixes to the budget process to avoid shifting pain and problems to county residents.
“We now have a $20 billion deficit that is affecting every city, county and school in the state,” Fifth District Supervisor Michael D. Antonovich noted during the board’s weekly meeting. He said the “rainy-day fund” that the supervisors created to help weather fiscal emergencies isn’t big enough to “withstand a tsunami that is coming from Sacramento.”
Third District Supervisor Zev Yaroslavsky chided Schwarzenegger for shifting blame to California’s congressional delegation during the governor’s Sunday appearance on “Meet the Press.” “This is not Washington’s fault,” Yaroslavsky said. “The state got itself into its own mess.”
Calling the budget crisis “gargantuan,” Second District Supervisor Mark Ridley-Thomas blamed the two-thirds rule, the state’s constitutional requirement that all budget and tax measures must pass by a super-majority. “Unless that’s changed, I’m sorry to say, we will be here year after year in a similar predicament,” Ridley-Thomas said.
Fourth District Supervisor Don Knabe said that by slashing funds to mandated programs partially funded by federal matching funds, California would be throwing away federal money for services the county is required by law to provide. He called the situation “extremely frustrating,”
For Zev’s remarks, watch the video below.
October 27, 2009
Against the vast backdrop of the federal stimulus program, $420,084 may not seem like such a massive sum.
But to Tiffany Gallindo, it’s huge. It means she can keep her job on the front lines of the Ryman Arts program, working to bring a free visual arts education and college guidance to gifted Los Angeles high school students, many of them low-income.
It means that Samuel Jang gets to continue his work as production manager for the Southwest Chamber Music Society, including helping to put together ambitious upcoming tours to Mexico and Vietnam.
And it means that Kenton J. Haleem of the Hollywood Entertainment Museum can bring back a position recently put on “hiatus”—a program manager in the organization’s media arts training program for at-risk kids.
All three organizations recently were singled out for grants of American Recovery and Reinvestment Act (ARRA) funds from the National Endowment for the Arts. The cash infusion comes thanks to the efforts of the Los Angeles County Arts Commission and the City of Los Angeles Department of Cultural Affairs, which together were able to preserve 21 positions in 16 arts organizations.
“The arts are a huge economic engine for our whole region,” says Laura Zucker, executive director of the County Arts Commission. “This is an important employer,” Zucker says, noting that the 300-plus arts organizations that are funded by the county employ more than 21,000 people.
And the importance of the organizations can be measured in more than just paychecks.
At Ryman Arts, a small nonprofit using donated studio space on the USC campus, they’re feeling the economic pains of students and recent alumni first-hand.
“Their calls and needs have been more urgent: Can we point them to more scholarship opportunities because they can’t take on more college loans? Can we arrange for them to stay after class to draw, because the electricity has been turned off at their apartment?” the organization said in its application for the grant. “Can we write another recommendation letter for a college application because they don’t have an art teacher at school?”
On the front lines is Gallindo, handling the phones, shepherding student applications, working to bring the aspiring artists and their work into the fold.
“I actually went to an arts high school,” says Gallindo, a dancer who attended Los Angeles County High School for the Arts and had been working at an insurance company before joining Ryman. “It changed my life and it opened doors. To be a part of something that is providing that opportunity to kids today is very rewarding.” (View recent student artwork on Ryman’s Flickr site).The grant “just gives us a huge sigh of relief,” says Ryman’s executive director, Diane Brigham. “With the downturn, I had to lay off another position entirely… We’re [now] a four-person organization. And I’m really glad we’re not a three-person organization.”
At the Southwest Chamber Music Society, there’s a similar mixture of excitement about upcoming projects—and concern about how to carry out an increasingly ambitious mission in an economic downturn.
On the plus side, the Los Angeles Cultural Affairs Department is sponsoring Southwest as it travels later this year to represent the U.S. at the Guadalajara FIL Arts Festival. Even more complex is next year’s State Department-sponsored Ascending Dragon Music Festival and Cultural Exchange, which will include music festivals, educational programs and administrative workshops in the U.S. and Vietnam.
“This is what we’re calling a transformative year for Southwest Chamber Music,” says Executive Director Jan Karlin, “and we needed to bring in someone to manage it.”
But because Southwest is “seeing a substantial decrease in most of our funding sources,” the federal stimulus funds were needed to pay Jang’s salary, the organization said in its application. He will not only to help manage the upcoming tours but also holds considerable responsibilities for Southwest’s musical and educational outreach throughout Los Angeles County.
Jang, whose background is in financial systems analysis and who served on Southwest’s board as treasurer before joining its staff, says he is relishing the change in perspective that comes with his new position.
“Having come from the financial services world—one of the casualties of this recession—it’s a really eye-opening opportunity for me,” he says. Working with “staff, musicians and audiences puts a more human face on this organization. Just last week, I coordinated the start of our music educational program at Keppel and Pasadena high schools.”
Across town, the Hollywood Entertainment Museum has been trying to help a new generation write its own kind of history, as 75 high school students—many of them dropouts, on probation, or otherwise “at risk”—learn the ropes of entertainment industry trades. The museum’s educational arm, the Hollywood Media Arts Academy, which is a collaboration with L.A. County Office of Education and the Probation Department, combines core academics with elective classes, including animation, dance, film production and acting.
The federal grant “can’t come soon enough,” says Haleem, the organization’s director of education and development, who says the group’s program manager had been placed on “somewhat of a hiatus.” Now that there’s money to rehire, he says, “I’m hoping she’s still available.”
“Things are tough right now,” he says. “I think that is the story of the nonprofits right now.”In all, the NEA gave out 630 direct grants totaling $29.7 million, with $4.45 million going to California, including funds provided to the city and county commissions.
To view a full list of the county and city grants, click here.
October 22, 2009
In theory, it was a win-win.
Nine years ago, California voters overwhelmingly approved a measure to put low-level drug offenders on a path to rehabilitation while potentially saving taxpayers huge sums in jail costs.
Proposition 36 guaranteed non-violent drug and alcohol abusers the right to enter community-based treatment programs in lieu of incarceration. Since its passage, a yearly average of more than 50,000 individuals statewide has opted for the program, more than 25% of them in L.A. County.
Today, however, the alternative-sentencing program is imperiled, a victim of California’s budget mess. State legislators, faced with a gaping deficit this summer, eliminated the measure’s $120 million budget, forcing California’s hard-pressed counties to confront the consequences.
Although the state has appropriated $18 million in other treatment monies and has held out the possibility of giving counties millions more in federal stimulus funds next year, the impact on L.A. County has been swift and severe. In late September, the Board of Supervisors was forced to sign off on a stunning 80 percent reduction in Prop. 36 treatment services.
“The law will still be on the books. People will still be looking for treatment. But the treatment won’t be there for many of them,” says Nicholas Vrataric, executive director of the Clare Foundation, a Westside treatment center.
Some of the fallout so far:
- Nineteen Prop. 36 drug courts have been shut down because of the slashed state funding. The Probation Department, for its part, is no longer assigning officers to misdemeanor offenders, who represent about 30 percent of total participants in Prop. 36 programs, or to centers where violators are assessed for the kind of treatment they need.
- The waiting list for Prop. 36 treatment is swelling and expected to hit around 5,000 by year’s end, says John Viernes Jr., director of the county Public Health Department’s Alcohol and Drug Program Administration. Until recently, it was zero.
- Weekly drug tests for Prop. 36 defendants have been cut to once every two weeks.
- County health officials have begun urging providers to offer treatment alternatives that cost far less than the residential and out-patient plans currently being used. Many treatment centers, however, say they’re not yet skilled in providing these alternatives and question their effectiveness.
From its earliest years, studies have shown that Prop. 36 has saved substantial sums in prison costs, with about a third of participants completing treatment—roughly the same rate as for people outside the criminal justice system who’ve sought treatment, according to UCLA researcher Darren Urada, principal investigator for an annual statewide study of Prop. 36. In L.A County, the completion rate is even higher, about 46 percent.
Still, many government players in the criminal justice system have dismissed the program as little more than a get-out-of-jail-free card, an ideal that has fallen far short of its promise to reduce substance abuse and recidivism.
Superior Court Judge Peter Espinoza, supervising judge of the criminal branch in Los Angeles, says that “at any given time, 57 percent of the felons eligible for Proposition 36 have a bench warrant outstanding,” indicating they aren’t reporting their progress to the court as required. “We consider it one of our least successful endeavors,” he says.
Scott Stickney, a Probation Department official, says that up to 70 percent of traditional, non-Prop. 36 defendants successfully complete treatment and probation, a much higher rate than for Prop. 36 participants. Stickney argues that the measure lacks the kinds of consequences, such as jail time, that many drug offenders need as motivation to complete treatment and probation.
The truth is that no matter what the funding levels or criticisms, Prop. 36 remains the law of the land, guaranteeing certain drug offenders a right to opt for substance abuse treatment rather than jail. And that has left the county’s public health and probation officials scrambling to stretch very scarce dollars.
Viernes, of the county’s alcohol and drug program, says one goal is to find ways to lower treatment costs, without sacrificing effectiveness, so that large numbers of Prop. 36 clients can still be accommodated. That may mean shortening residential treatments from 90 days to 60 days for some clients, he says, or sending them to cheaper outpatient programs or sober living homes, which would cost far less.
But the Clare Foundation’s Vrataric is one of many providers who worry that if treatment programs are cut too much, they might become ineffective. “I think the provider community has to push back,” he says. “In good conscience, that’s not good public policy.”
The county also is determined to try to line up other sources of funding for providers serving the Prop. 36 population.
And that’s welcomed news for providers such as Kathy Watt, director of the Van Ness Recovery House in Hollywood, which specializes in gay, lesbian, bisexual and transgender addicts. The 20-bed facility has seen its county grant money already cut from $51,000 to $9,736.
“By the end of the month, we’ll be done with the funding” she said in a mid-October interview.
To compensate for the funding drop, Watt says she and other staffers took a 20 percent pay cut and vows not to turn away clients seeking the center’s specialized treatment. “We’ll find funding somehow,” she says.