CLEARWATER — Just three months after laying off 260 people and cutting $77 million to balance the budget over two years, Pinellas County Administrator Bob LaSala has "grim" news.
The 2010-11 budget already has a $40 million shortfall in its general fund, the money that pays for parks, the Sheriff's Office and social services.
The biggest culprit is dropping property values. The county planned for a 6 percent drop. Instead, a county forecast projects taxable values to fall 12 percent.
A smaller factor: The county fell $8 million short of LaSala's suggested cuts last year after a dispute with Sheriff Jim Coats over funding.
The picture gets worse if nothing is done. The deficit rises annually to $84 million by 2013-14, according to the forecast.
The County Commission will have its first budget talk Tuesday. Before that, LaSala agreed to talk to the St. Petersburg Times about how Pinellas plans to respond to the shortfall.
After deep cuts last year to avoid a big deficit, why do you project one now?
"Because property values have not bottomed out. What's the evidence that supports that statement? Short sales and foreclosures are in fact the dominant type of transaction in the market and in fact making the market in terms of assessed valuation."
Did the county fail to cut enough last year?
"We targeted an $85 million cut which we never fully achieved. We tried to anticipate a two-year period of time and project a nearly 6 percent drop in (2010) property tax revenue due to falling property values, and those falling revenues were greater than that.
"We had a 10 percent drop last year, and we were projecting a 6 percent drop this year, and that's never been an approach in the history of the county. And yet we did not have that much of a drop — but a greater drop, almost twice as much."
In October, you told employees you foresaw no more layoffs based on current trends. Is that caveat true — will there be lost jobs?
"Yes. I think we were clear that the two-year plan was aimed at settling and stabilizing the organization and service delivery mechanisms … and if you're looking to cut $40 million out of this budget, there aren't the vacancies that we had to absorb much of that. And there's a smaller base to absorb those cuts."
Are program cuts or tax rate increases unavoidable?
"I think that's a policy question for the county commissioners. Last year, I said the role of county government was going to be redefined for the next decade or more. I didn't realize how significant that statement was.
"The county appears to have limited options: increasing property tax rates, increasing fees for parks and other services, and cutting programs. No specific proposals are detailed. The commission shot down tax increases and park fees last year, but Commissioner Ken Welch signaled interest in charging park entrance fees before the forecast."
The county has a $94.1 million reserve fund, but LaSala said he is skeptical of tapping one-time money for recurring costs.
What comes next?
LaSala and the commission will discuss the forecast and options at a 9:30 a.m. meeting Tuesday at the Clearwater courthouse. The county also plans public meetings later this year and is considering other ways to gather the public's thoughts on how government should change before finishing the budget in September.
Said LaSala: "I'm not looking for guidance on Tuesday. But I will tell you the questions that need to be answered. Forty million dollars is the gap that needs to be closed — how should that be apportioned? Should we take a one-year approach? … Or, we know that there is (an extra) $30 million deficit around the corner, should we take a multiyear approach? … We have a structural imbalance."
David DeCamp can be reached at [email protected] or (727) 893-8779.