COUNTY AIMS TO BALANCE NEXT BUDGET\Outlook better than last year's, Reed says.

Byline: David Bloom Daily News Staff Writer

Los Angeles County is facing a projected $516 million shortfall for next fiscal year, but the county's chief administrative officer said Monday that's a big improvement over last summer's worst-ever financial outlook.

"We will have a balanced budget," said CAO Sally Reed. "It will have some reductions, but not the massive ones that we had last (summer)."

Heading into last summer's budget season, county officials were facing a shortfall of nearly $1.2 billion in a budget that ultimately totaled about $12.5 billion.

The Board of Supervisors privatized clinics, closed jails and other facilities and laid off more than 3,500 workers, with another 600 Probation Department workers now facing layoffs unless the state approves funding within the next two weeks.

The county's latest estimates indicate that it probably will be able to maintain services at current levels, but is far from whole, Reed said.

"It will be a budget that does not meet all the needs," said Reed. "We are maintaining what we are doing now, but I'm not saying that's an adequate level of service."

Supervisors greeted Reed's projections with some relief, given the process of cuts, layoffs and closures they have faced over the past several months.

But the supervisors said the state must return at least some of the nearly $1 billion in property taxes it shifted from the county beginning in 1992 and 1993.

"We're not going to scare the pants off Wall Street (bond traders worried about county bankruptcy), but I still think we have the same problems unless we get some relief from Sacramento," said Supervisor Gloria Molina. "The budget dilemma is not as great as last year's budget, but it's still a bare-bones budget."