Imagine suddenly getting a tax bill in the mail for $147 million.
That’s pretty much what happened to Orange County last month. A judge ruled it improperly withheld property tax revenue from the state.
The county is appealing the ruling, but in the meantime it has to slash $73 million from next year’s budget, which supervisors are expected to approve Monday.
“The reductions as a general rule were approximately 5 percent,” said Frank Kim, Orange County’s Chief Financial Officer.
Kim says departments that deal with public safety saw the smallest cuts, while the biggest reductions came in deferred maintenance and IT upgrades that were planned before the ruling was handed down. Had the county not drawn from its reserve, the cuts would be much worse. However, Kim says that’s a temporary solution.
“We can do that for a year,” said Kim. “But once we get into fiscal year 2014-15, which is a year away, and we still don’t have a solution from the state, we would have to take a more significant reduction.”
That could be a 10 percent cut to the county’s budget, making next year’s 5 percent reduction seem relatively minor.