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L.A. County Supervisors to transfer $29.1 million in reserves to cover welfare, building costs

January 27, 2009 |  1:24 pm

Los Angeles County supervisors voted this morning to transfer $29.1 million from county reserves to cover an upsurge in welfare and construction costs, saying they still may have to cut services and jobs next month if state leaders follow through on plans to defer health and social services payments.

Supervisors voted 4 to 1 to approve the proposal by County CEO William T. Fujioka after removing $5 million in proposed spending for solar energy and other construction projects. Supervisor Gloria Molina voted against the plan after questioning several expenses, including $2 million earmarked for a county television channel.

“I just can’t support a whole series of budget adjustments that do not make sense to me at a time when a whole lot of people might miss out on services because of issues that are not of our doing from the state,” Molina said.

The state controller is expected to delay $105.6 million in payments to Los Angeles County next month, and the governor has proposed deferring $1.4 billion in such payments during the following six months.

“We do not have the cash flow to deal with this,” Fujioka told supervisors this morning. “We would have to go on the market to borrow the money.”

Supervisor Zev Yaroslavsky said borrowing “is not an option.”

“How much are we going to have to pay in interest — if we can get a loan?” Yaroslavsky said, adding that tapping reserves and borrowing are simply “deferring the inevitable.”

“This is ridiculous,” he said.  “The state deferring its responsibility so it can defer balancing the budget.”

Supervisor Don Knabe, who chairs the board, questioned whether the county can transfer legal responsibility for welfare payments back to the state or refuse to cover the state portion of payments.

Philip K. Browning, the county’s director of public social services, said welfare rolls were growing more than expected and any cutbacks would hurt the 145,000 low-income families being served daily.

“The impact will be very dramatic if it carries on more than a month,” Browning said. The board also approved Fujioka’s proposal to increase contributions to the county’s rainy day fund to 10% from 5% of the estimated $4.7 billion in revenue this fiscal year.

-- Molly Hennessy-Fiske