County Budget Gap Hits $16 Million : Finances: The projected shortfall was increased because tax revenue was less than expected, officials say.

By ERIC LICHTBLAU

Jan. 30, 1992 12 AM PT

TIMES STAFF WRITER

SANTA ANA — The sluggish economy has catapulted this year’s projected county budget shortfall to more than $16 million, forcing planners to consider unprecedented cuts, according to a draft report obtained Wednesday.

In just over a month, the projected shortfall in the county’s general revenue jumped from about $10 million to $16.4 million, largely because taxes aren’t generating as much as was hoped, officials said.

“If these numbers turn out to be correct, it’s certainly a continuation of the disturbing news we’ve been having all along,” Board of Supervisors Chairman Roger R. Stanton said.

In early December, county officials unveiled dreary budget projections, which were expected to cause delays in scheduled openings of expanded facilities at Orangewood Children’s Home, Juvenile Hall and the Probation Department. But no one is sure how deeply the new, escalated projections for the current fiscal year may cut into county programs.

Beyond the $16.4-million shortfall, county budget analysts now project another $5 million gap as a result of a realigned state system for distributing funds for health, social services and other programs.

And the red ink may grow only worse as county budget analysts continue to pore over Gov. Pete Wilson’s state budget and anxiously await sales tax figures from what appears to have been a slow Christmas season.

The projections are based on a draft report circulated this week among county staff. Budget officials stressed that the report must still be finalized before it is filed with the Board of Supervisors for consideration at a key Feb. 11 meeting on a range of budget issues.

The figures are tentative, but the news thus far appears bleak.

“Economic conditions just haven’t turned around like we thought they would,” said Steven Franks, a senior budget manager in the county administrator’s office. “But we’re trying to deal with it in a measured response.”

County staff is recommending that the Board of Supervisors take $2.5 million from the county’s $22-million contingency fund to help meet the shortfall.

That would drop the contingency fund below the $20-million mark that the county auditor’s office has recommended, but county officials say they are still confident they can maintain their fiscal security and high bond ratings.

The staff’s recommendation that $9.4 million be cut from existing program budgets poses a greater risk.

Officials hope the bulk of this may come from savings garnered from vacant positions, but no one is sure just how much may have to be cut in programs or services.

“That question is too early to tell,” said Assistant County Administrator Murry Cable.

It is the first time that the county has had to cut so much from its existing budgets in the midst of the fiscal year. “This is unprecedented,” Cable said.

Supervisor Gaddi H. Vasquez warned that while the county may be able to find ways now to balance the current year’s budget, “cuts today will mean even deeper cuts tomorrow” as the county wrestles with an expected $66-million shortfall for the 1992-93 fiscal year.

“It’s going to be survival of the fittest around here,” Vasquez said.

But there was a glimpse of good news for the county Wednesday, as figures released by County Treasurer-Tax Collector Robert L. Citron showed the county taking in more money this year from its biggest businesses.

Through the first half of the tax collection year, the Irvine Co. had paid $44.1 million in property taxes, or $3.3 million more than last year; Pacific Bell was second at $18.1 million, or $657,000 more; and Southern California Edison third at $16.4 million, for an increase of $1.8 million.