June 27, 2022
With national financial woes caused by record inflation and the heightened demand for government services amidst the Covid-19 Pandemic, state officials are scrambling for resolutions. Orange County, California budget is set to approve as $8.8 billion for 2022-23; an increase of $1.1 billion from the 2021-22 budget. Expanded revenue from the American Rescue Plan Act of 2021 also contributes to the California budget.
Portions of the proposed California budget allocate funds to address the rise in government services required to deal with the Covid-19 pandemic. Increased testing numbers, changes to work schedules and office layouts, and supply chain problems have forced state and federal governments to provide additional relief. The American Rescue Plan Act of 2021 provided Orange County with $308.4 million in financial support last fiscal year. The same amount is expected again this year, and financial plans include economic support and the development of new health facilities.
Under the current proposal, a majority of the annual budget is reserved for funding state and federal projects. Support for local programs and services relies on additional revenue sources, such as sales tax and property taxes. Sales tax revenue has already increased by 9.1%; allowing nearly $500 million to be set aside for public safety in the proposed budget. The projected $44.6 million in property tax revenue, though beneficial for county funding, is a clear indicator of universal price increases.
The United States has experienced 8.6% inflation since May of last year; a number that hasn’t been reached since 1981. On top of soaring gas and energy prices, the average US household is spending nearly $500 more every month to purchase the same goods.
The increase in prices has hit Orange County particularly hard. With mortgages, now too high to afford, and depleted assistance funds, residents are moving out of Orange County into the surrounding “Inland Empire,” according to OC Supervisor Katrina Foley. In an attempt to provide solutions, Foley proposed the only major change to the budget: reallocating a portion of ARP funding.
With Foley’s proposal, $5 million of the funds would be used to pay $100,000 in down payments on the mortgages of county employees buying their first homes. Though her fellow supervisors received letters endorsing her plan, none of them seconded her plan. Supervisor Lisa Bartlett stated that the program was delivered “very much last-minute” and needed analysis before it could be considered.
The Board of Supervisors will consider the final approval of the California budget on June 28th. After review by the governor, it will likely return for one more round of consideration in late July.