Alameda County Administrator Susan Muranishi is proposing a $2.8 billion budget for the new fiscal year beginning July 1 that would include modest funding increases to community service providers and expand resources for affordable housing.
Muranishi said her budget would allow the county to continue building its financial reserves and would be balanced by closing a $72.2 million funding gap without significant program reductions or layoffs to its 9,600 employees.
Muranishi said that while this year's funding gap is smaller than those recorded during and just after the recent economic downturn, when shortfalls routinely topped $100 million, its size is daunting given the relatively positive conditions in which growth in the national and local economies is providing some boost to county revenues.
She said the county's challenge of keeping its finances in balance isn't likely to decrease in the coming years because a growing wage gap is keeping a large number of residents reliant on government services and there are many forecasts that suggest the economy could fall back into recession in the near future.
"High demand for safety net services administered by the county will continue to strain our resources, as rising home values and rents reduce the stock of affordable housing and require residents to devote larger and larger shares of their incomes to housing costs," Alameda County Board of Supervisors president Scott Haggerty said in a statement.
Muranishi said rising real estate values have resulted in a 7.1% increase in the county's assessment roll and increased general purpose revenues for the county, allowing the county to fund increases to many of the community-based organizations that receive support from its general fund.
She said she is proposing that the county increase to $500 million its annual funding for community-based organizations that provide health and human services as well as housing, community development and public safety programs.
Supervisor Keith Carson said, "We may be near or at the high water mark in terms of the improving economy, and still we face no small challenge in keeping our finances in order. If, as expected, the economy begins to slip, we should expect those challenges to grow significantly. We've got to do all that we can to prepare for tougher times ahead."
Muranishi said demand for food assistance, subsidized health care, cash aid and other support remains high in Alameda County, despite an unemployment rate that has fallen to 4.3%, which is about half what it was just a few years ago. She said that suggests the county is home to growing numbers of working poor whose wages are failing to keep up with accelerating costs.
Muranishi also said soaring housing costs are one of the biggest factors squeezing residents with low incomes.
She said that although cuts to federal housing programs mean there's less funding available for the county to meet community needs, the Board of Supervisors has continued to spend over $100 million annually in housing programs across various agencies and departments.
In addition, the board has committed $5 million to $7.5 million per year in limited discretionary funding towards affordable housing programs across the county. The Board also is considering placing a housing bond on the November ballot that would raise hundreds of millions of dollars more for affordable housing programs.
Carson said, "There's no doubt that the housing crisis is at the top of the list of those challenges needing our immediate attention" but he added that "aging infrastructure isn't far down that list."
Carson said, "I'm concerned it is going to get more and more difficult to fund needed upgrades to our transportation corridors, community centers and facilities for public safety and other service providers."
The county's funding gap is the difference between the cost of maintaining existing programs and projected revenues.
Muranishi is proposing to close the gap through a combination of spending reductions, revenue increases and one-time strategic changes such as efficiency measures.
The Board of Supervisors will hold public hearings on the proposed budget from Wednesday through Friday and then vote on it on June 28.