Riverside County’s difficult finances

Over the last several years, Riverside County’s budget has gotten by more thanks to the strong pre-pandemic economy than the fiscal prudence of the Board of Supervisors.

The county must remain fiscally disciplined, more so than it has in past years, if it is to remain on a fiscally sustainable trajectory

Last week, Riverside County Executive Officer Jeff Van Wagenen offered a brief budget presentation outlining current budget trends, strategies and priorities. Van Wagenen particularly flagged the county’s reserves as a cause for concern.

The county’s reserves are expected to stand at $244 million by the end of the current fiscal year in June, before falling to $215 million the following year. By comparison, the county’s reserves were $275 million in 2019. Even back in 2019, when reserves were relatively stronger, Van Wagenen noted that, on a per capita basis, the county’s reserves were far below most surrounding counties.

When Riverside County’s reserves stood at $112.80 per capita, San Bernardino County reserves totaled $218 per capita. Likewise, San Diego County’s reserves stood at $212 per capita. And Los Angeles County boasted reserves of $275 per capita.

Under current budget predictions, Riverside County’s reserves are expected to fall to $84.3 per capita by June 2022.

An economic downturn would prove calamitous for the county budget and all who rely on county services.

“Playing loose and wild with the budget and not having a large enough reserve for such a county that’s larger than several states... we’ve been very fortunate,” noted Supervisor Jeff Hewitt. “I’ve got a bad feeling about this.”

Considering Van Wagenen’s noting that budget revenue growth may soon plateau, continuously growing pension costs, a $3.6 billion unfunded pension liability and the board of supervisors’ tendency to approve any any every contract with the county unions, the fiscal discipline of the five member board will soon be tested.

They may not have a choice soon. “

We anticipate that there will be a situation where a department needs something, another department needs something, and we just do not have the funding to pay for those,” noted Van Wagenen.