The County of San Luis Obispo addressed an expected $26.2 million gap in next fiscal year’s recommended budget related to the Coronavirus Disease 2019 (COVID-19) pandemic.
The reductions include $6.5 million in departmental budget cuts, use of one-time reserves in the amount of $12.8 million, and $6.9 million in voluntary savings directly from employees.
“This pandemic has affected our County in so many ways, including unprecedented budget impacts,” said District 4 Supervisor and Board Chair Lynn Compton. “The County faces a staggering budget gap as county residents need our services the most. The Board will strive to do what is best for our community.”
The County Board of Supervisors held a public budget hearing for Fiscal Year 2020-21 (FY 2020- 21) Recommended Budget this week to consider staff’s recommendations for balancing the budget for the coming fiscal year, which begins on July 1. The recommended departmental budget cuts included a reduction of 4 percent to the level of General Fund support provided to non-public safety departments. In recognition of the County Board of Supervisors’ prioritization of public safety departments, County staff recommended a 1 percent reduction for public safety departments, as well as an additional $2.4 million in reductions to public safety, due to an expected loss of Proposition 172 revenue specific to those departments.
The Board tentatively adopted most recommendations but used one-time dollars to backfill the loss of revenue to significantly reduce the budget cuts for public safety departments.
County staff had initially recommended a $577 million budget for the County’s General Fund. However, a drop in consumer spending related to the COVID-19 pandemic means a significant loss in funding sources for the County.
Simultaneously, the County is seeing an increase in overall expenses related to a higher demand for public services and COVID-19 response. As a result, County officials estimate a budget gap of $32 million to $56 million for FY 2020-21.
“The cuts we are facing are larger than any single year during the recession,” said Wade Horton, County Administrative Officer. “These next few years will be challenging, but we will work closely with Department Heads and the Board to weather the storm.”