Monterey County’s Workers Facing Layoffs

Thursday, February 26, 2009

Monterey - Facing a projected $163 million budget shortfall during the next three fiscal years, the county will need pay concessions from its employees soon or it will hand out major layoffs.
That was the message Supervisor Lou Calcagno sent loud and clear to county department managers, as well as union officials, at Wednesday’s budget committee meeting. He made his remarks after the presentation of a three-year budget forecast that outlined the challenges the county faces as a result of a sharp decline in revenue because of the struggling economy.
Calcagno said the reality is that pay concessions will have to be negotiated quickly or the county’s deficit will only get worse, which will ultimately mean more layoffs.
“I know we’re trying to be sensitive to people, but we can’t skirt it forever,” Calcagno said.
According to the forecast, the county faces a $41.6 million deficit by the end of the 2009-10 fiscal year without major spending reductions, and deficits of $55.8 million and $65.4 million in succeeding years.
County budget manager Dewayne Woods said the county will already have to spend about $11 million in reserves to balance its current year’s budget, but it can’t afford to continue that practice. The county has made a series of midyear budget cuts to help close part of a projected $24.9 million budget gap this year.
Woods said the county anticipates $19.6 million in revenue rolled over from the previous year, which could help close that gap, but he said no more funding of that kind is expected in future years.
Employee salaries and benefits are about 55 percent of the county’s general fund budget, and about 80 percent without entitlement program spending. Employee contracts are up for negotiation this year and in 2010.
County budget division director Rosie Pando said employee pay concessions may not be enough to avoid layoffs, depending on how supervisors decide to address the budget shortfall.
Pando said the county “has to get salaries in line” or continue facing deficits into the future. She said the supervisors have indicated they want to try to keep as many social service programs in place as they can, especially because of increased demand for them in the face of the recession that has cost many people their jobs and homes.
County Counsel Charles McKee said concessions and layoffs are both “time-intensive,” underscoring the need for immediate action.
More details about possible action the board can take will be presented to the supervisors Tuesday. A budget workshop will follow Wednesday.
Budget hearings and workshops will continue through April as county officials consider ways to close the gap, and a final proposed budget is due by the end of May. County budget hearings on that proposal are set for two days starting June 8.
Pando and Woods told Calcagno and Armenta they recommend the board incorporate a two- or three-year strategy as they consider next year’s budget.
“We need lots of action on July 1” to begin offsetting future deficits, Pando said.

By JIM JOHNSON
Herald Salinas Bureau
Updated: 02/26/2009 08:46:03 AM PST
Jim Johnson can be reached at 753-6753 or .