Despite a budget surplus this fiscal year of $1.6 million, Sonoma County’s General Fund is looking at deficit of $13 million in FY 2024-25, growing to a projected $16 million in 2027-28. For context, the current budget is $2.26 billion in total expenditures.
But annual deficits are forecasted, according to Deputy County Administrator Peter Bruland, who briefed the Board of Supervisors as part of his five-year fiscal forecast Tuesday. The projection is based on an anticipated decrease in property tax growth, reductions in one-time funding, and an increase in pension costs due to investment declines in pension funds.
While the General Fund projections are designed to present a view of the county’s fiscal health and provide advance views into potential future issues or opportunities given existing economic conditions and county revenue sources. While they only cover about 26 percent of the total Fiscal Year 2022-23 budget, they account for most of the county’s discretionary funding and a majority of county staffing costs.
“The development of General Fund projections during the fall sets the basis for programming discretionary sources in the coming fiscal year,” said Sheryl Bratton, County of Sonoma Administrator. “By estimating how much general-purpose revenue will be available, county departments that depend on the General Fund to deliver services and programs to our community can be more informed and better prepared to weather uncertainty.”
On June 17, the Board of Supervisors adopted a balanced budget for FY 2022-23 (which runs July-June). Revised estimates project a General Fund surplus of $7.4 million based on an anticipated increase in FY 2022-23 revenue from property tax, sales tax, and Proposition 172, a half-cent sales tax in support of local public safety functions. These increases are partially offset by reduced projections in revenue from the Documentary Transfer Tax and Supplemental Property Tax, which are dependent on property sales and may slow as interest rates increase.
Under current assumptions, despite an anticipated FY 2023-24 budget surplus of $1.6 million, absent certain policy changes the county General Fund is projected to enter a deficit of $13 million in FY 2024-25, growing to a projected $16 million in 2027-28.s.
By law, the Board of Supervisors is required to adopt a structurally balanced budget each year.
Budget development is a months-long process that begins in the fall of each fiscal year and culminates with Budget Hearings and the adoption of the budget, which are scheduled for June 2023. Budget workshops take place in April in advance of budget hearings.
The Fall 2022 Five-Year Fiscal Forecast and Budget Update is available here:
https://sonoma-county.legistar.com/LegislationDetail.aspx?ID=5921718&GUID=B81A2F2E-D25E-4C86-BD30-2372A86E461F.
County of Sonoma Financial Policies for 2022-2023 are available here:
https://sonomacounty.ca.gov/administrative-support-and-fiscal-services/county-administrators-office/budget-and-operations/financial-policies-for-2022-2023.
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