County mulls using funds to plug holes in new budget
Chair Jeff Cogen expects revenue picture to sharpen as state, federal budgets take shape
Multnomah County's budget this year is expected to go from good to bad to worse.
The good news? Multnomah County Chair Jeff Cogen says the county's 'structural deficit' - the gap between ongoing taxes and other revenue and the cost of county services - has narrowed to $4.4 million. Considering how large that deficit has been in recent years, Cogen says, that 'counts as good news.'
Cogen has come up with several proposals to trim county spending in ways he says won't clip services to residents, to address that deficit. County management will be taking the biggest hits, at least initially.
• Combine the county's facilities, fleet management and records operations, eliminating three management positions. That's expected to save $500,000 a year.
• Expand the number of employees that many managers are expected to supervise, which will result in demotions or layoffs of five to 10 people. 'Honestly there's some cases where people are managing two people,' Cogen says, 'and that's not going to be the case any more.' Expected savings: $1 million a year.
• Pay freeze for employees not represented by unions, who generally tend to be management. Expected savings: $1.5 million a year.
Cogen also asked his department managers to produce ways to cut their spending by 2 percent each. He may glean remaining cuts from those lists.
Cogen would not discuss any potential savings from concessions by unionized employees, saying such issues are being raised in collective bargaining talks.
In state collective bargaining talks, workers may be asked to contribute 3 percent of their salaries into their pension plan, half of the so-called 'employee contribution' to the Public Employees Retirement System that is covered by the state. The county also covers the entire employee contribution, and could save the equivalent of 3 percent of payroll costs if workers pay half the employee contribution to PERS.
Cogen says he 'wants to see where the dust settles' in state management/labor talks on PERS benefits before commenting on what he'd like to see for county employees.
'I'm waiting to see how things play out in Salem,' he says.
Cogen also wants to avoid service cuts in his budget proposal because he anticipates having to re-open the budget once, and maybe twice, once the state and federal budgets are set. That's where we come to the 'bad' and 'worse' scenarios.
'The state cuts and the federal cuts are going to be cascading down upon Multnomah County,' Cogen says, perhaps $30 million to $100 million from each source. 'I've never seen so much uncertainty.'
But state and federal budgeting likely will take longer than the county's process.
Local cigarette taxes?
Cogen expects to propose his budget in May, and county commissioners likely will approve some version of it in June, before the start of the new budget year in July.
The state budget year also starts then, but state lawmakers usually take longer to OK the state's two-year budget.
The county is bracing for steep reductions in state funds for local public safety, health and mental health services. Cogen says the county likely will reopen its budget process in the mid-summertime, and then figure out how to address declining state funding for county services.
It's not clear if the county will know by then the status of federal budget cuts.
That's how we get to the 'worse' stage. Congress is facing the largest deficits of any layer of government, and its next budget year begins in October. So any congressional budget cuts affecting county spending may have to be addressed in a third budget process.
Cogen does have a considerable amount of one-time funds available to plug some holes, $13.4 million, once he knows what those holes are.
As of now, Cogen is leaning toward spending $3 million of that one-time money to reduce the county's debt, thus narrowing the structural deficit in future years. Then he hopes to use money to buy a new electronic security system for the county juvenile detention center in Northeast Portland, and acquire new budgeting software. That would leave roughly $6 million to make up for state budget cuts, Cogen says.
His budget does not propose any new revenue, though the county is lobbying the Legislature to permit counties to propose cigarette taxes. The county could raise $8 million a year by raising the cigarette tax here by a quarter a pack. If the Legislature acts on that front, the county could move swiftly.
'If they pass it on June 29th, we could start putting a law in place the next month,' Cogen says.