County Faces New Shortfall of $29 Million : Budget: The latest forecast would mean the third major deficit in the 1991-92 spending plan, for a total of $75.2 million.

By LEONARD BERNSTEIN

Nov. 6, 1991 12 AM PT

TIMES STAFF WRITER

San Diego County’s grim fiscal picture grew even bleaker Tuesday with the announcement that supervisors could soon be coping with another revenue shortfall of $29 million--the third sizable deficit in a 1991-92 budget that is just 5 months old.

If the newest forecast proves accurate, the total budget deficit for the fiscal year that began July 1 will reach $75.2 million, as revenue from state and local sources continues to fall short of successive, increasingly pessimistic forecasts by county budget planners.

“The economy has died, so there’s just not the money to support these programs,” said Assistant Chief Administrative Officer David Janssen, who provided the newest estimate Tuesday.

Grim-faced supervisors offered no ideas on how the financially strapped county could deal with the latest predictions of revenue shortfalls, this one composed of a $12-million drop in anticipated state revenue and a $17-million decline in expected local taxes and fees.

“We all know that government has to change the way it does business,” Supervisor Susan Golding said. “The old rules just simply can’t apply anymore.”

The county’s financial woes began with the supervisors’ annual budget deliberations this summer, when officials predicted that revenue would be $30.6 million short of program needs in the $1.9-billion budget. Because the vast majority of the county budget consists of state and federal pass-through programs, budget cuts came from the $305 million over which the supervisors have discretion.

The supervisors closed the $30.6-million gap by imposing a hiring freeze, closing two honor camps and the Vista Health Center, and spending millions of dollars in one-time funds on ongoing programs. Until the supervisors had a last-minute change of heart, the deficit nearly claimed most of the beds in the county psychiatric hospital and key Sheriff’s Department programs such as the Astrea helicopter service.

Last month, the board learned that carry-over revenue from fiscal 1990-91, expected to supply $20.9 million for the current budget year, would actually fall $15.6 million short of that goal.

Despite efforts to tighten spending at the end of last fiscal year, the savings could not overcome the effects of the economic downturn, the state’s fiscal crisis and a court order requiring the county to continue funding a medical program for indigents without promised state funds, according to a report to the supervisors.

The supervisors moved to plug the $15.6-million hole in their budget Tuesday. They voted to take $4.3 million from the county’s contingency reserve, including $1 million that was to be spent on raises for county executives and $2 million in anticipated costs of the general relief welfare program.

In addition, they agreed to spend $1.8 million that would have been used to purchase furniture for courts that were scheduled to be built in the former El Cortez Hotel before that project collapsed. They devoted other one-time money to the spending gap, including $2.2 million unspent funds for capital projects.

A proposal to save another $2.3 million by financing vehicles for the Sheriff’s Department, instead of paying cash, ran into opposition from Supervisor John MacDonald, who said the plan would exacerbate budget problems in coming years.

“I can’t support debt financing, pushing it off for another year,” said MacDonald, the board’s chairman. Janssen said he would come back to the board with possible alternatives in the future.

Then Janssen told the supervisors that a new $3-billion revenue shortfall in the state’s budget could mean as much as $12 million less for San Diego County. The money was earmarked for social service, health and other programs that the state transferred to counties and promised to fund, Janssen said.

But now it appears the revenue simply won’t be there, he said. “We will probably have to deal with the $12-million deficit ourselves,” he said.

In addition, local revenue from sales taxes, vehicle license fees and real estate transfers is about $17 million short of expectations, Janssen said. The recession is also the culprit locally, cutting deeply into revenue from property taxes, property tax transfers, vehicle license fees and sales taxes, said Manuel Lopez, the county’s director of financial management.

“We are experiencing the same catastrophe in revenue,” Janssen said.

County officials offered no solutions to the newest deficit, but drastic measures appeared imminent. A meeting has been set for later this week to begin addressing the problem, Janssen said.

“There is nothing at this point . . . that is sacred,” he said. “Nothing.”