Tuolumne County is facing a projected budget deficit of nearly $5 million that could more than double over the next two years unless significant measures are taken to address the growing gap between revenues and expenses.
That was the message sent to the county Board of Supervisors on Tuesday during a discussion about strategies to balance the budget for the 2018-19 fiscal year, which begins on July 1.
“We need to make some systemic changes — drastic changes — and we need to develop a growth plan,” said District 2 Supervisor Randy Hanvelt.
The primary reason cited for the disparity is that the county’s revenues aren’t increasing at the same rate as its cost of doing business.
County Administrator Craig Pedro cited a number of additional challenges that lie ahead, including future labor agreements, possible increases in the amount the county has to pay into the California Public Employees Retirement System, and other expenses related to the anticipated opening of a new county jail late next year.
If the revenues remain the same, Pedro said one of the ways to reduce the projected deficit for the upcoming years would be through $3 million in reductions to county departments and services.
Pedro said a half-cent sales tax would provide an estimated $2 million in revenue per year and increasing the existing hotel tax by 2 percent would generate an additional $700,000 per year, though both would have to be approved by voters.
Another way would be to expand the hotel tax to RV parks and campgrounds, Pedro said.
“I don’t know if we can solve the problem without attacking it from both sides,” said District 5 Supervisor Karl Rodefer. “Usually we look at reducing costs, but we need to do something major to get $1 million or $2 million a year (in additional revenue).”
Rodefer said he was trying to give the public a “heads up” that the board is going to reach a point this year when it will have to make some tough decisions.
Hanvelt said he would rather look at policies that would support a “reasonable development” level in the county. Rodefer agreed with the need for economic growth, but it’s something that occurs over a longer period of time.
“Growth is the answer, but it may not get us there,” said District 4 Supervisor John Gray. “I think we still have to have all of the options open.”
District 3 Supervisor Evan Royce said he was “very sensitive” about raising taxes, but he also believes there is a need to put more money away in reserves.
“Eventually we’re going to have more rainy days,” said Royce. “The stock market isn’t always going to be at all-time highs.”
Pedro presented what he referred to as “extraordinary alternatives” to save money in the coming years, though he stressed that he wasn’t endorsing any of the proposals.
Closing down the year-old Mother Lode Regional Juvenile Detention Center and returning to the practice of sending youth to facilities in other places would save the county nearly $1 million a year.
Whether the county would be able to do that is unclear because most of the cost to build the facility was paid for by a $16 million state grant.
Pedro said he felt the fact that they were even having the conversation was “unnerving” because it could also make other counties think twice before signing a contract to house youth at the regional facility.
Limiting the capacity at the $40 million new county jail could also save the county about $900,000 a year, though $33 million of the cost to build that facility are being covered by two state grants.
“This is a terrible thing to even be talking about when the state was helping us to get the capacity that we needed, but I’m just putting it out there because these are things I’ve heard,” Pedro said.
Another “extraordinary alternative” that would potentially save the county $2 million a year would be to create a special district to operate the county libraries and recreation services, or impose a special tax to fund them.
Chrys Day, president of the Friends of the Tuolumne County Library’s board, said she was against the idea of forming a special district, though she declined to go into the specific reasons. She added that there were a number of issues to work out before putting a tax measure on the ballot.
Day said that recreation and library services need to be considered as part of the county’s goal to promote economic development.
“Recreation and the library are important to the county as assets that need to be funded,” Day said. “Cutting these services or underfunding them will diminish the attractiveness of this county in the eyes of potential entrepreneurs and residents.”
Two people spoke about repurposing “dormant” properties and facilities owned by the county, such as the Jamestown Mine property and former Tuolumne General Hospital in Sonora.
Scott Fischler, of Jamestown, talked about a new bipartisan effort to legalize industrial hemp led by Senate Majority Leader Mitch McConnell, R-Kentucky, and suggested the Jamestown Mine as an ideal place for growing the product if the legislation is successful.
Hemp is type of a cannabis plant that’s classified by the federal government as a scheduled controlled substance, though it contains negligible amounts of the intoxicating chemical THC.
The fibers from hemp are known to be good for making products like rope, cloth, construction material and biofuels, among other uses.
“(Citizens) are not going to accept cuts to services when property is sitting dormant and crops can be grown on them that are commercial,” Fischler said, adding that agriculture is major part of the county’s history.
Debi Bautista, the county clerk and auditor-controller, reminded the board that she said the county government needs to fundamentally change how it does business a year ago when it was facing a similar deficit situation, though she hasn’t seen much change on that front.
Bautista said the board needs to look at all expenses and weigh them against each other. She added the deadline for submitting any potential tax measure to be included on the Nov. 6 election ballot is Aug. 12.
“I would encourage you not to take anything off the plate,” she said.
Contact Alex MacLean at email@example.com or (209) 588-4530.