S.J. County proposes balanced $1.9B budget

STOCKTON — Despite an increase in unemployment and a decrease in taxes and consumer spending due to the COVID-19 pandemic, San Joaquin County will most likely have a balanced budget for the upcoming fiscal year.

San Joaquin County Administrator Monica Nino presented the 2020-2021 proposed budget to the board of supervisors on Tuesday, stating the outlook for the next 12 months looks to be structurally sound.

The county’s total budget will be $1.9 billion, an increase of $60.5 million from fiscal year 2019-2020, she said.

Nino is anticipating the county to have $25.9 million in its general fund on June 30, the end of the current fiscal year. Prior to the pandemic, that total was expected to be more than $30 million, she said.

“The 2020-2021 proposed budget has been carefully designed to advance the public interest, while at the same time remain fiscally sound,” Nino said in a media statement released Tuesday afternoon. “This proposed budget was crafted during a very difficult time, fighting a global pandemic which has unprecedented implications for our local economy, as well as a very unpredictable future for California along with the uncertainty of the state budget and the impact that will have on the county budget in the coming months. As a result, additional investments in programs, services and resources may be limited.”

For the coming fiscal year, Nino said California’s general fund revenues are expected to decline by more than $41 billion, and that combined with increased costs the state is facing a $54.3 billion deficit.

The financial downturn is due to the impacts of the COVID-19 pandemic, with a resulting 18.8% unemployment rate in California and an expected $15.6% decrease in consumer spending.

Sales tax, one of the main sources of revenue for cities, is expected to decrease by 27.2% at the state level, while corporate tax is expected to drop by 23% and personal income tax is anticipated to decline by 25%.

Those tax decreases reduce realignment funding in the coming months, Nino said.

As part of its 2011–2012 budget plan, the California State Legislature implemented a major shift, or “realignment,” of state program funding to local governments.

At that time, the realignment plan provided $6.3 billion to local governments — primarily counties — to fund various criminal justice, mental health, and social services programs and remain ongoing on an annual basis.

The county has budgeted $96.6 million in revenue from 1991 and 2011 realignments, but a decrease in funding source could result in negative impacts to services such as public safety, behavioral health services, child welfare, child protective services, adult protective services, CalWorks and CalFresh, she said.

Nino said Proposition 172 revenue projections for public safety funding remain uncertain, and the county could receive $4 million less than the $67.3 million originally projected.

Newsom’s latest budget revise proposes reducing child support funding to 2018-2019 levels. This would mean a $1 million decrease for San Joaquin County in the upcoming fiscal year, Nino said, rather than the $3.1 million that was expected before the pandemic.

In addition, Nino said 15 positions in the Department of Child Support Services are recommended for elimination, with another 12 employees potentially impacted.

“It is abundantly clear that the pandemic and related economic consequences have presented some difficult challenges,” she said. “However, our commitment to strong governance means citizens and businesses can trust that vital services will continue throughout San Joaquin County.”

Despite the decreases from state and federal funding, the county will maintain its reserves, she said, adding $5 million to its contingency in order to achieve the Board’s policy of 5% of total appropriations.

The county will still be able to fund the entire 5% contribution toward its unfunded retirement liability at a cost of $8 million, primarily financed from ongoing funding sources. An additional $7.3 million will be directed to the Unfunded Pension Liability Reserve, she said.

Another $5.9 million in funding is available for homeless programs in the county, which is in addition to the $25 million allocated in 2019-2020.

“I’m glad we’ve maintained our focus on providing a structurally balanced budget,” Supervisor Bob Elliott, who represents the county’s fifth district on the board, said Tuesday.

“I just think that should be the starting point of any budget we come up with,” he said. “Of course, if situations require the use of contingency funds, that’s what they are there for. But I think our efforts should be to maintain a structurally balanced budget to the extent possible.”

Further discussion of the 2020-2021 budget, as well as its adoption, is scheduled for the June 23 and 24 supervisors meetings.

The county’s complete proposed budget document can be viewed online at