$4 million deficit is Sutter County's 'new normal'

This story has been corrected from an earlier version that appeared in print.

Call it progress, or as one supervisor did, the "new normal," but a projected $4 million deficit for fiscal 2012-13 didn't cause Sutter County supervisors to bat much of an eye Tuesday.

As both county officials and supervisors pointed out, a deficit of that amount is still an improvement over a year ago, when the county had to close a $14 million gap.

"It's going to make for another interesting year," Supervisor James Gallagher said after County Administrative Officer Stephanie Larsen made her presentation during the board meeting.

At the midpoint of the 2011-12 county budget, Larsen told the board, revenues are mostly at budget or slightly above, in the case of sales taxes. And expenditures on salaries and benefits, which make up the largest percentage of what the general fund is used for, look to be slightly lower than budgeted, she said.

The result is an expected $4 million balance when the county's fiscal year ends June 30, though Larsen said dipping into reserves in recent years to close previous holes has left only about $9.4 million there the county could easily access.

For the next fiscal year, she said, she projects increases in pay, pension and health insurance costs, though in some cases they're not as severe as they could be.

Because the county is in the last phase of having employees pay their share toward pension costs, Larsen said, the net is actually $800,000 positive in pension savings from the general fund for 2012-13.

And health insurance increases have come in below projections, so an expected 10-percent rise for 2012-13 might also be lower, she said.

Larsen said she expects the state's budget to not significantly impact county budgeting, but she was hesitant to commit to the idea.

"I shouldn't put paradise up here, because state budget sessions are such a crap shoot," she said. "It's a guess."

Higher expenditures for salary and benefits, plus decreased revenues and some expected deferred expenditures, put the county in a $4 million hole to start, and Larsen said she would suggest solving it with recommendations for 10 percent cutbacks in departments. If necessary, she would plan to use no more than $1 million in reserves.

Assistant county administrative officer Shawne Corley said there are other measures being discussed that the county could also use to address the deficit.

Supervisor Jim Whiteaker said the deficit had to be put into perspective, because a year ago departments had to come up with 20 percent cuts.

CONTACT Ben van der Meer at bvandermeer@appealdemocrat.com or 749-4786. Find him on Facebook at /ADbvandermeer or on Twitter at @ADbvandermeer.