Budget Strategy: A Survey of California County Governments

The current recession has taken a hard toll on California local governments. With declining revenues and increasing costs of providing services, many local governments are struggling to balance their budgets. This paper, based on a survey of California county governments in the summer of 2009, intends to investigate what factors have caused their budget shortfalls and what strategies they have adopted to cope with the fiscal crisis. Survey findings show there are three basic reasons for California county budget shortfalls: shrinking revenues, reductions in state aid, and rising costs for labor, goods and services. Confronted with pressing fiscal challenges, California county governments have adopted a wide range of traditional budget control measures to close their revenue and spending gaps, such as personnel control and service cuts. They have also become creative and used this opportunity to reexamine their spending, find savings, and improve government operations. In addition, this fiscal crisis provides an opportunity for federal, state, and local governments to work together to address the problems of federalism, health care and pension systems.