The Orange County Board of Supervisors voted a 5% pay cut for ourselves and 97 department heads and top managers as part of the draconian measures to balance a county budget battered by growing demands and shrinking revenues.

The salary slice was unanimously accepted by the Board and while we cannot impose it on the seven other countywide elected officials (Sheriff, District Attorney, Treasurer, Clerk-Recorder, Public Administrator, Auditor-Controller and Assessor) there is every indication they will voluntarily accept the pay cut. This one cut alone will save the county about $1 million.

The $5.5 billion 2009-10 proposed budget represents an 18% reduction from last year. Cuts were made across the board in all departments. Plummeting real estate values and retail purchases cut into property tax and sales tax revenues. Thanks to Senator Lou Correa’s SB8, OC property tax allocation was increased by $35 million, providing some relief. However, there have been deep cuts to state-funded programs and these may continue, forcing downward readjustments throughout the year.

County officials have little power to raise—or reduce—revenue on our own. Many of our public services are state-mandated and rely on the legislature for annual funding. Some, such as the library system and flood control, receive dedicated property tax that cannot be transferred to other purposes.

Some revenues come from contract cities, especially those paying us for Sheriff’s patrols, while others—like OC Airport—are structured as enterprise funds to be self-supporting from internally generated revenue.

Since educational funding has constitutional protections under Prop. 98 (passed 1988), the legislature typically takes funds from city and county governments to fund education. Even so, schools face cutbacks as well, especially with a crippled state budget process, sinking income and property tax revenues and a short-sighted legislature with term-limited vision.

About 800 county employees will be laid off, including 200 from the Sheriff’s Dept., which will be cut by $28 million. The good news is that crime rates continue to decline and there are fewer inmates in our jails. The relationship between crime and recession is counter-intuitive. Crime actually declined during the 1930s depression, while spiking during the generally prosperous 1960s-70s.

Orange County government has done a much better job than the State in anticipating downturns and not relying on one-time monies or temporary fixes. Five Supervisors and an appointed CEO can plan much better than a 120-member legislature and a governor. For the past 6 months, for example, all 3,797 Social Service Agency employees took an unpaid day off every two weeks. These furloughs saved the county approximately $8.4 million.

While we must protect, conserve and properly allocate our revenue streams for essential county services, we must also act in partnership with the state. We’re all in this together. In the major state responsibilities such as public education and criminal justice, there are opportunities for improving services while saving money. Let’s use this crisis as an opportunity not just for survival, but revival.