The state budget crisis is continuing to hammer our 58 counties. One rural county is operating from paycheck to paycheck, a dire situation, according to my sources.
Nevada County is better off than many but still facing some big challenges. Exisiting proposals call for deferring some state payments to our counties for seven months — worse than last year’s deferrals.
Our county’s biggest areas of concern are Health and Human Services (about $1 million a month of deferral) and Public Works (about $250,000 per month of deferral).
“While our reserves in these operating funds are strong and will cushion these cash flows, the cost of money impact will certainly be significant (well over $100,000),” according to county executive officer Rick Haffey in his weekly memo.
Staffing positions have been reduced from 976 when the current budget was adopted last year to 959.
Votes on the new state budget could occur as early as next Friday.
It’s been a tough week economic-wise:
•Gross domestic product shrank at a 3.8 percent annual rate in the fourth quarter, the biggest contraction in 26 years.
•The stimulus package passed by the U.S. House is running into opposition because it does not have enough infrastructure spending. The Senate is drafting an alternate package. Meanwhile, the stock market is losing confidence.
•Around here, the sale of Thomson Grass Valley — one of the biggest employers and tax revenue providers — is creating uncertainty. I’m optimistic it will be sold to a qualified buyer. I hope the new buyer will keep the existing operation intact. It will be a real test of how our community (and its touted attributes) are perceived by an outside business.
Prediction: The next two weeks will perk up with votes on a revised stimulus package and state budget. Seems our elected people can’t get it together until the “darkest hour.” How sad.
We’re still in a deepening recession, however. It’s one thing to pass a stimulus package, but it’s quite another for it to begin gaining traction. In short, the patient is still in ER, a long way off from the recovery room.