PSC102 State and Local Governments Unit 7 DB: Addressing a Budget Crisis, POST University, August 2025

        PSC102 State and Local Governments Unit 7 DB: Addressing a Budget Crisis

Having learned about different revenue sources, how would you tackle a budget crisis if you were leading a state or locality?  When responding, consider the types of revenue, regressive vs. progressive taxes, government efficiency, service cuts, privatization of services, and where the money ultimately goes. 

Alameda County, California is known for its high cost of living, with expenses significantly exceeding the national average. Housing, in particular, can be a major challenge, with median home prices around $1 million and one-bedroom apartments renting for approximately $2,500 per month. This makes effective budgeting and seeking out financial resources crucial for residents. 

The county has a vast variety of residents ranging in a wide range of income levels and financial stability. The cities range from highly urban like Oakland and Hayward to vast open space like Fairmont hills and Castro Valley. I think that all angles of taxes and creativity need to be taken into consideration.  

Here are some ideas for how to run a vast and diverse county like Alameda County: 

1. Budget preparation 

• The County Administrator's Office (CAO) plays a central role in preparing the annual county budget. 
• This involves gathering budget requests from various county departments and agencies. 
• The CAO analyzes these requests, identifies potential funding gaps (where requested expenditures exceed available revenue), and works with departments to develop strategies for balancing the budget. 
• The process incorporates an analysis of the impact of state and federal funding and policy decisions on county finances.  

2. Adoption 

• The Board of Supervisors adopts a balanced budget annually, typically by June 30th, to begin the new fiscal year on July 1st. 
• The county budget covers four main program areas: Public Assistance, Health Care Services, Public Protection, and General Government. 
• Public hearings and community workshops are conducted to provide opportunities for public input and feedback on the proposed budget before final adoption.  

3. Funding sources 

• Alameda County's budget is financed by a diverse range of revenue sources, including state, federal, and local governments; property and other taxes; charges for services; fines, forfeitures, and penalties; and other revenues. 
• In fiscal year 2024-25, State and federal sources, including Medicaid and Medicare charges for services, were estimated to contribute significantly (around 58.5%) to the county's General Fund revenue.   

4. Monitoring and adjustments 

• The CAO monitors the county budget throughout the year, using tools such as quarterly and 5-year forecasts, and analyzing developments that could impact county finances. 
• Departments may make necessary adjustments to their initial proposals based on factors like state and federal funding decisions or unforeseen fiscal challenges. 
• Amendments or transfers between spending types within a department may be authorized by the City Manager, while amendments to the total level of appropriations or transfers between funds require City Council approval.  

5. Fiscal responsibility and accountability 

• The county prioritizes fiscal responsibility, seeking to conserve resources, sustain core services, and incorporate budget equity principles. 
• The County has received high credit ratings from national agencies, which allows for lower interest costs on capital projects, saving taxpayer resources. 
• Audits and reviews are conducted to ensure that government spending at the state and local levels is free of waste and abuse. 
• Local governments are required to produce reports evaluating the extent to which local expenditures align with their service goals and undergo financial audits.