County’s Discretionary Revenue Rising
RIVERSIDE (CNS) – Riverside County government expenditures are holding within limits as the halfway point of the 2024-25 fiscal year arrives, and reserves are growing above previously estimated levels, but “escalating costs” throughout the economy remain an ongoing concern, according to a report that the Board of Supervisors will review Tuesday.
The 35-page midyear budget report showed a 3% increase in revenue compared to what Executive Office staff earlier predicted would be available by this juncture.
The county’s reserve pool is now projected to reach $731 million, rather than $720 million, in the current fiscal year, according to the report.
“While discretionary revenue reflects conservative growth, several significant factors require our attention moving forward,” the narrative stated. “Among the most pressing concerns are the escalating costs related to maintaining service levels, labor cost increases and addressing the critical need to repair or replace aging facilities. These pressures are compounded by the uncertainty of federal funding and the upcoming governor’s May Revise to the state budget.”
One of the largest increases in near-term costs was tied to the Medical Retiree Health Insurance Fund, operated by the Department of Human Resources. The outgo was estimated at $9.75 for the current fiscal year. Only $5 million was budgeted. Despite the surge, officials said a reserve account contained sufficient dollars to cover the excess.
Public safety agencies were generally holding inside spending thresholds. However, the Department of Animal Services would need a $750,000 augmentation to its budget stemming from “greater medical needs for animals in its care.”
The agency has been operating at maximum capacity at all four county shelters for at least the last two years.
Officials said the revenue deficiency could be covered by savings netted from available funds left over due to departmental positions remaining unfilled.
The only major tax revenue shortfall detected to date was in Proposition 172 Pubic Safety Sales Tax receipts, which were projected to slip by $9.2 million in 2024-25. Other income streams were expected to more than offset the loss, which may have resulted from decreased consumer spending.
The budget for 2024-25, approved by the board in June, contained $9.2 billion in appropriations, representing an 11% increase over the 2023-24 spending blueprint.
County CEO Jeff Van Wagenen confirmed at the start of the fiscal year there were 2021 American Rescue Plan Act funds still in the county treasury. They were, by law, supposed to be spent by Dec. 31. The county received $480 million in ARPA allocations and another $500 million in 2020 Coronavirus Aid, Relief & Economic Security Act money. The federal infusions have been applied to “budget stabilization,” community development, infrastructure projects and related programs.
Under the current budget, $2.6 billion is going to the Riverside University Health System, the largest set-aside in the spending plan, at 27% of total expenditures. The outgo translates to a 5.6% increase in healthcare- oriented obligations.
Public safety agencies are next, with $2.2 billion in expenditures, 8.5% more than last year’s outlays and 23% of the composite budget, while the social services portfolio is receiving $2.1 billion in General Fund receipts, also representing an 8.5% increase compared to 2023-24 and comprising 21.4% of the budget.
The next budget update will be the third-quarter report on May 20. Hearings on the proposed 2025-26 budget are tentatively slated for June 9-10.
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