BUDGET PLAN ADDRESSES HEALTH COST RETIREE TAB GROWS TO NEARLY $400 MILLION.

Byline: TROY ANDERSON

Staff Writer

Los Angeles County officials on Monday proposed a $21.2 billion budget for next year that pours money into public safety and health care and sets aside $400 million to help pay retirees' soaring medical costs.

Chief Administrative Officer David Janssen said early estimates put the county's retiree health care deficit as high as $14 billion, some $5 billion more than previous estimates. Officials plan to release official estimates next month and are working with employee unions to develop strategies to address long-range costs.

"It's a big liability," said Zev Yaroslavsky, who chairs the Board of Supervisors.

"It's a challenge for Los Angeles County and it's an even bigger challenge for other governments that have been less responsible, financially speaking. But even for a county like ours that has been extremely responsible, this is going to be a huge ticket."

The annual taxpayer tab to pay for retiree health care costs has grown from about $200 million in 2003-04 to nearly $400 million for the fiscal year that begins July 1. The costs are expected to hit $500 million by 2010-11.

Despite the retiree health deficit, Janssen said revenues are up for the third consecutive year, primarily because of elevated housing prices. However, officials warned that the slowing resale market presents the biggest risk to the county's revenues and proposed a conservative 1 percent increase in spending.

The county's property tax revenues are expected to grow 6 percent, to $3.6 billion, in 2007-08, compared with 10 percent growth this year.

"There is no question that the real-estate market remains warm enough to keep our property tax revenues expanding," Supervisor Gloria Molina said. "Still, we must keep our cautious budgetary approach. It has kept this county's coffers sound and, thus, preserved the public health and safety network upon which so many of the county's hardworking families depend."

The proposed budget calls for hiring 1,425 new employees, boosting the county's work force to 102,058. The county hit the 100,000 mark late last year.

Most of the increased spending would go to the Sheriff's Department, which is under a court order to improve jail conditions.

Construction projects and beefed-up staffing are expected to help reduce the number of inmates granted early releases.

As the new Los Angeles County/USC Medical Center opens early next year, replacing the famous "General Hospital" building, Janssen has earmarked $10 million to the Sheriff's Department to assume responsibility for inmate outpatient medical services currently provided by LAC/USC Medical Center.

Janssen said the new hospital will be state of the art.

"It's absolutely unbelievable," Janssen said. "It's the most sophisticated public hospital in the nation."

The budget also includes $2.6 million to fully fund and staff the new Los Angeles Regional Crime Laboratory, scheduled to open May 11.

"It's on time and under budget," Janssen said. "It's a miracle. I hate to say it, but the project was managed by the state of California."

The budget also provides $17 million to add 105 deputies to unincorporated areas, which have been beset in recent years with long response times to 911 calls.

To address the county's epidemic of gang violence, the budget calls for spending $6 million to hire 47 employees in the Sheriff's and Probation departments and District Attorney's Office. An additional $800,000 is proposed to create an intelligence center to allow police to track gang members in real time and exchange information about their activities.

"The sheriff asked us for tens of millions of dollars for gangs, but this is what we could afford," Janssen said.

Under a federal consent decree to improve conditions in the juvenile halls and camps, the Probation Department will receive $75 million to redesign camps, restructure camp management, hire 336 staffers and meet other needs.

To balance the health department budget, which now expects to go $300 million in the red in 2008-09, Janssen proposed transferring $100 million from the general fund and other areas to help stabilize the public hospital system.

"I am still concerned about the Department of Health Services, where the structural deficit is quickly reaching a day of reckoning," Supervisor Don Knabe said. "The health department is anticipating a shortfall of at least $80 million in this coming fiscal year, which must be addressed before we close the books on the year."

troy.anderson(at)dailynews.com

[phone]

CAPTION(S):

box, chart

Box/Chart:

Los Angeles County budget

SOURCE: Los Angeles County

Daily News