With Sonoma County’s tax revenue up in all categories, and a healthy amount socked away in reserves, the Board of Supervisors is contemplating its next budget cycle with a brighter financial outlook than any year since the recession.
The county’s current budget is projected to increase 9 percent by the end of the fiscal year ending June 30, for total spending pegged at $1.6 billion. The rise is due largely to an influx of state and federal money associated with President Obama’s federal health care law and state prison realignment.
County staffing has increased 3.3 percent from June 2014, for 4,204 total staff, while revenue from sales, property and hotel bed taxes shot up by a range of 3 to 12 percent, with the increase expected to continue over the next five years, according to Christina Rivera, the county’s budget manager.
Rivera presented the fiscal outlook to supervisors Tuesday, as the board and county gear up for their first two-year budget cycle, stretching from this coming July to mid-2017.
“Rather than looking at a one-year picture, we’re looking at our operations from a two-year perspective,” Rivera said. “That way, we can better plan ahead.”
During the county’s budget hearings next month, supervisors are expected to weigh in on additional priorities over the next two years — including housing, education and infrastructure initiatives. The budget hearings are scheduled to start June 15 and could last up to two weeks, though the board has settled matters in much quicker time in recent years.
Rivera attributed the county’s $13.5 million general fund surplus — 3 percent of the approved $415 million general fund budget for the current fiscal year — to savings achieved through employee salaries and benefits changes and increased tax revenue. The cushion gives supervisors more discretionary dollars next year to dedicate to the county’s backlog of unmet needs, including deferred maintenance on county buildings, construction of the new courthouse and alleviating a shortage of workers who handle health and human service assistance for the low income and indigent.
The county has made a conservative projection of $410 million in general fund spending over the next fiscal year and $421 million in the subsequent year. The remainder of the overall budget is made up primarily of state and federal money and other fee-based programs.
Even with revenue growing, supervisors are emphasizing the need to boost financial reserves and pay down county debt of about $900 million, including bonds to pay off pension liabilities.
“We’re operating leaner and more efficient than ever,” said Supervisor Shirlee Zane, speaking about the general fund savings reached over the past year.
Still, the county faces rising annual pension costs and road maintenance expenses estimated at as much as $954 million over the next 20 years.
Other policy goals supervisors have endorsed, but have not funded entirely, include a slate of health, technology and social welfare initiatives.
“We recognize that in our budget, even though we are experiencing an economic recovery, demands on our county services are also high,” Board of Supervisors Chairwoman Susan Gorin said. “We don’t have a lot of discretionary funds moving forward.”
In addition to growing tax revenue, the county’s general fund also benefited over the past year from increased Regional Parks revenue from memberships and day use fees as well as money to implement federal housing and homelessness assistance programs.