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Layoffs, budget cuts hit cities, counties

By   /   Monday, July 5th, 2010  /   Comments Off on Layoffs, budget cuts hit cities, counties

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In what’s become an annual blood-letting ritual in California, local governments in the Tri-Counties passed budgets for the new fiscal year that add up to tens of millions of dollars in spending cuts and dozens of lost jobs.

A survey by the Business Times of the three county governments and the 25 cities in the region reveals at least $73 million in cuts in their 2010-11 budgets, along with 31 layoffs. Most cities and counties passed their budgets in June and started the fiscal year on July 1.

Government at all levels is the tri-county region’s biggest employment sector, and  the recession has been hard on the industry. Lower property values and retails sales mean less tax revenue. Higher unemployment means greater demand for social services. And the state’s perpetual budget crisis adds another level of uncertainty.

Given all that, it’s actually surprising that local governments aren’t in worse shape, said Bill Watkins, an economist at California Lutheran University in Thousand Oaks. In the grand scheme of things, 31 layoffs from an industry with tens of thousands of workers isn’t all that bad.

“Government is big and it tends to be stable, but I’ve still been quite surprised by the ability of the local governments to not have to cut large numbers of people,” Watkins said.

Cities and counties have avoided mass layoffs in a few ways. They’ve shrunk their workforces by attrition or early retirement instead. They’ve cut back on spending in other areas, like road maintenance or construction projects. They’ve raised fees to scrape together more revenue. And they’ve persuaded their employee unions to give back significant chunks of their salaries and benefits.

The city of Santa Barbara, for example, won $4 million in concessions to help close a $9 million deficit. Unpaid furlough days and changes to the benefit structure resulted in a 6 percent salary decrease for most employees, said City Administrator Jim Armstrong.

Without those concessions, widespread layoffs would probably have been necessary, Armstrong said.

State unions have also agreed to concessions recently. But Watkins said he was pleasantly surprised to see how “cool” government workers in the Tri-Counties were with giving up pay and benefits to save their employers’ budgets.

“It seems like once people go to Sacramento or Washington, D.C., they change and they become jerks,” Watkins said. “At the local level, people seem to be more reasonable.”

Even without many layoffs, most government agencies have cut their payrolls significantly over the past few years through hiring freezes and other measures. Basic services are getting pinched. Last year the city of Ventura cut back on mowing lawns and pulling weeds in parks and road medians. This year the Ventura City Council voted to save money by closing a fire station.

Most city government officials say their revenues have bottomed out and are expected to climb a little in the next few years. The downsizing and cutting could continue, though, because pension commitments and the chaos in Sacramento both put stress on local budgets.

“We’re right-sizing our organization and planning for long-term fiscal stability,” said Simi Valley Assistant City Manager Laura Behjan, whose city has eliminated 70 positions in the past three years. “From the standpoint of revenues, we are starting to see that we’ve bottomed out. The question is, how long will it take to come back? We think it’s going to be a long, slow process.”

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