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Tuolumne County Faces Future Budget Challenges

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Sonora, CA — The Tuolumne Board of Supervisors accepted the county’s Mid Year Budget Report and approved the Modified Multi-Year Budget Forecast with a good deal of discussion on addressing looming liabilities, such as the lack of funds to pay for roads and road improvements.

CAO Craig Pedro said looking at next year, based on best current forecasts, the county is expecting to see $700,000 less from the Highway User Tax Account and $300,000 less from the federal Secure Rural Schools Act (SRS).

SRS itself still hasn’t been allocated by Congress. If it is not renewed, a previous funding mechanism called the 25% Fund Act of 1908 kicks in. Money from the 1908 Act is based on timber harvests. Tuolumne county expects to receive  $170,000 related to the Rim Fire salvage harvesting that has been done but that is much less than the $474,000 that was available from SRS. At one time SRS funding was over $1 million and paid for roads and other things but the funding has been steadily decreasing. District 5 Supervisor, Karl Rodefer and District 1 Supervisor Sherri Brennan stated they are somewhat hopeful SRS funds will be allocated this year. Supervisor Brennan said, “A number of folks want to see SRS funding go away in favor of timber harvest and that has muddied the waters.” Brennan noted, “We have been so focused on Rim Fire salvage, that we are looking at easily 4-5 years out before we see some real increases [in timber harvesting] from what has been a static 20 million board feet per year.”  She noted the county needs to “prepare to transition to a level that will sustain it.”

The Payment in Lieu of Taxes (PILT) fund, managed by the Interior Department, was only renewed for one year. Pedro noted that its long term fate remains unclear which is also concerning. Tuolumne County received over $2.1 million in PILT funding for 2015.

The most pressing issue in the forecast for the coming years Pedro said will be the shortfall in road funding of $1,792,330 which is projected to increase to over $2.3 million in four years. Taking in the various projected revenue sources, the county faces a roughly $2,892,464 shortfall next fiscal year (see the chart below).

Counties have received less Highway User Tax dollars over recent years due to more energy efficient vehicles, and increased public transit offerings. Related to the topic, District 3 Supervisor, Evan Royce, said “The Gas Tax went up in a hidden way because of cap and trade, but we still pay the highest gas tax in the nation and have the worst roads. We are not getting the best bang for our buck.”

The numbers are a forecast, not a budget, and the Mid-Year Budget Report indicates that with a few exceptions, departments continue to do well in managing expenditures and keeping them within budget. Pedro pointed out that the county is on track to fund PERS due to several actions taken by the county, PERS, and state voter approved changes. There is now a plan in place to fully fund all state wide PERS obligations. A past news story with more details is here.

There are three more months left for the county to come up with solutions to meet next year’s budget and another update on the Federal and State program funding situation will be presented in August.