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San Bernardino board gets annual county financial update
San Bernardino Mar 29, 2024
| Image courtesy of San Bernardino County
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San Bernardino County, in line with the state, will likely see slower economic growth this year, officials reported to the Board of Supervisors last week.
However, CEO Luther Snoke and Chief Financial Officer Matthew Erickson’s fiscal update emphasized that the “county’s decades-long tradition of conservative and cautious spending will serve county residents well during what could be a 2024-25 budget season fraught with risk and uncertainty at the state and national levels,” according to a county statement.
Inflation data for the Inland Empire presented to the board on Tuesday showed the rate was 2.9% in January, a near return to its January 2021 rate of 2.2% following a 10% peak a year ago.
The Federal Reserve responded to the spike in inflation by raising interest rates, officials said. Erickson told supervisors that the longer interest rates remain high, the county could face revenue shortfalls as a result of reduced home sales and a slow-down in consumer spending.
Still, “these economic headwinds have not stopped California home prices, which are well above the pre-pandemic peak in February 2020,” according to Snoke and Erickson’s presentation. “As of October 2023, seasonally adjusted existing single family home sales had declined for 26 consecutive months, and rapidly rising mortgage rates have further exacerbated California’s chronic housing shortage.”
Officials also warned of other risks to the county’s financial well-being that include a state budget deficit between $38 billion and $73 billion, a possible federal government shutdown, a recession if interest rates stay high and unforeseen natural calamities or other public safety emergencies.
Despite these looming challenges, “the Board of Supervisors has been prudent in preparing for any fiscal rainy day by taking a slow and measured approach to budgeting volatile tax revenues and strategically investing ongoing funding in reserves and one-time capital needs,” according to the county statement.
For fiscal year 2024-25, San Bernardino County plans to stay its conservative course by assuming property tax growth will be 3% “despite average annual assessed valuation growth of 6.6% in the last 10 years.” Officials also are counting on ongoing savings totaling $44.5 million in retirement costs that is largely the yield from the county’s pension obligation bond payoff this year.
“This board over a long period of time has been fiscally conservative in our projections,” 4th District Supervisor Curt Hagman said in a statement. “When we had upticks in revenues we didn’t go off and spend it the way the state and federal government does, spending everything they have every year and then suddenly not having it and finding they have problems. We have been trying to put money aside to last long past our service time to provide steady services to our residents.”
The executives’ annual financial briefing sets the stage for the May 7 budget workshop and the June 22 budget hearing, officials said. The recommended county budget’s expected release is May 21.
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