Officials say up to 1,400 jobs are at risk along with other
programs and services
San Jose – Solving the county’s projected $201 million deficit will require deep spending cuts that could mean lay-offs for up to 1,400 government employees.

Faced Tuesday with the bad news, county supervisors reluctantly approved – “in concept” only – drastic cuts for fiscal year 2007-2008, which begins July 2007, to plug the projected massive shortfall.

“I don’t want to get emotional here, we all have an affinity for what we are doing, but we cannot sustain our current size,” said Santa Clara County Executive Pete Kutras, presenting his deficit solution package to the board.

“I don’t care how you slice it and dice it, we have to find this $201 million.”

The discussion kicked off the county’s formal budget planning for the coming year.

Since fiscal year 2003, following the downturn of the economy, Santa Clara County has faced budget shortfalls totaling $802.6 million. In 2004, 845 positions were cut from the budget. In 2005, another 550 positions were eliminated.

And, the hard times continue as nary a major department goes uncut under Kutras’ deficit reducing strategies.

His plan, which helps set preliminary targets for spending reductions for each county department, would solve the current $201 million deficit with the use of $43.4 million in one-time funds and $158.2 million in cuts. Exactly how and where those cuts will be made has not yet been determined.

The hardest hit departments would be located in the medical field. Santa Clara Valley Medical Center, a county hospital in San Jose, is asked to eliminate $35.7 million from its list of expenses. Additionally, the county’s Mental Health Department is being asked to cut $33.9 million from its budget. And, community outreach services costing $6.7 million this year are being cut altogether.

“I think it’s fair to say no one is happy with these targets,” Kutras said somberly.

He later described the approach as “hardball.”

Elinor Stetson, chief public health nurse, told supervisors the proposed $22.6 million cut to the Public Health Department would endanger the public in the event of an epidemic.

“Public health is a keystone that must be sustained,” Stetson said.

Santa Clara County District Attorney George Kennedy also voiced displeasure with the proposed cuts, urging the board to think twice before eliminating $3.6 million from his office.

“The DA has the largest span of supervision in the county,” Kennedy told the board.

Supervisors readily acknowledged making final cuts would be difficult. But the board won’t consider next year’s budget until May 2007, when Kutras submits his final proposal.

“I think it’s important to note, this is just the beginning,” said County Supervisor Done Gage.

Concerned over how future cuts would affect services county residents receive, Gage asked Kutras to share details as the process moves forward. For example, Gage asked how lay-offs at Valley Medical Center would affect patients trying to make appoints over the phone.

“I think we need to tell (the public) up front” how services might change, Gage said. “Otherwise, we’ll end up doing more work explaining why” after the fact.

Kutras said he plans to present a more robust financial analysis, with a five-year forecast, in October.


Unanimously approved by the board, the key components are:

Reducing departmental spending by $155.6 million, mostly by cutting $109 million (25 percent of what’s currently spent) from health-related services.

Using $31.5 million of Valley medical Center’s reserves.

Applying $11.9 million in one-time funds to cover half the ongoing normal cost of retiree health insurance.

Using $2.6 million in recurring state revenue to offset the need for reductions in the Santa Clara County Department of Corrections.

Tony Burchyns covers Morgan Hill for The Times. Reach him at (408) 779-4106 ext. 201 or tburchyns@morganhilltimes.

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