The Votes Are In!
2024 Readers' Choice is back, bigger and better than ever!
View Winners → Home / Neighborhood / Riverside County /
Riverside County’s financial status at close of fiscal year stays strong
Riverside County May 20, 2023
| Photo courtesy of Intellectual/Pixabay
by
share with
Riverside County government’s finances at the close of the current fiscal year remain steady, with discretionary revenue still on track to beat initial estimates by almost $100 million, though costs are rising, and departments will have to adjust, according to a report the Board of Supervisors will review Tuesday.
“The near-term outlook appears stable; however, challenges are looming in years to come,” county CEO Jeff Van Wagenen said in an introduction to the third-quarter budget report for 2022-23. “While we continue to project increased revenues compared to the adopted budget, it should be noted that the pace of growth is slowing down significantly, while costs continue to rise to maintain the status quo, let alone increase service levels.”
As with the midyear report in February, the third-quarter update indicated that discretionary revenue will likely exceed initial projections by $89 million at the end of the fiscal year, topping out at $1.102 billion, rather than the $1.013 billion originally projected.
The gains are mostly the result of higher tax receipts, as residents shell out more for goods and services, as well as greater earnings from the county’s investment pool.
Property tax receipts are expected to expand $18.2 million more than what officials estimated before, while the county will likely take in $11.1 million in additional sales and use taxes, and separately, the county’s share of statewide Proposition 172 Public Safety Sales Tax revenue is projected to be $13.3 million greater than first estimated, according to the Executive Office.
Interest earnings within the Treasurer-Tax Collector’s investment pool, containing a range of fixed instrument products, are expected to be $45 million more than earlier estimated, officials said. The returns stem directly from the Federal Reserve Bank’s ongoing hikes to the benchmark short-term lending rate — pushing interest rates higher on the county’s investments — a process that began a year ago as part of a liquidity pullback strategy to attack 40-year high inflation.
County agencies, which number more than three dozen, continue to contend with higher cost pressures that require bigger outlays to deal with them, the Executive Office stated. Most of the budgetary challenges have been driven by revised or renewed collective bargaining agreements guaranteeing cost-of-living and merit pay hikes, as well as more county obligations to pay health, dental and other insurance.
Additional cost pressures stem from software upgrades, public safety outlays and public works.
The Executive Office will ask the board on Tuesday to approve $2.6 million in General Fund appropriations to cover some near-term spending requirements.
Officials said that the county reserve pool is projected to be $537 million, compared to $511 million estimated in November. The original estimate in June was $368 million.
The board approved a $7.45 billion budget for 2022-23, roughly 8% larger than the 2021-22 budget of $6.88 billion. Most of that money is comprised of nondiscretionary, or programmed, budget appropriations and includes “pass-through” revenue streams from the state and federal governments.
The county received almost $500 million in 2020 Coronavirus Aid, Relief & Economic Security Act allocations and another $480 million in 2021 American Rescue Plan Act money, and Van Wagenen acknowledged last June that just under 10% of the federal infusions were applied to “budget stabilization” in 2022-23.
The funds have been used for homeless and rental assistance programs, along with other social welfare efforts, but they’ve also been appropriated for infrastructure, or capital improvement, projects.
Hearings on the 2023-24 fiscal year budget will be held June 12-13.
More from Riverside County
