Legal Mandates
A large portion of the county’s budget covers programs or services required by state and federal law.  The Board of Supervisors has little discretion or control over these costs and/or level of services.

Court Orders
In addition to mandates, federal or state courts may issue an order or ruling which requires the county to finance a particular program or service.  The service then becomes a mandate for county funding

Appropriations Limit
(Gann Limit)
In 1979 the voters of California approved Proposition 4, which established appropriation limits.  This initiative, now article XIIIB of the State Constitution, limits annual authority to spend “proceeds of taxes” by the state, counties, cities, public schools, and special districts.  The appropriation limit is adjusted annually for changes in inflation and population.  The voters may approve an override to increase the appropriation limit for up to four years.

Revenue Limits
Proposition 13 of 1978 and Proposition 62 of 1984 limit the ability of local government (including counties) to raise taxes without a vote of the people.  Proposition 13 requires two-thirds approval by the voters to raise special taxes, and Proposition 62 requires a majority vote to raise general taxes.  Proposition 13 affirmed the state’s authority to redistribute taxes collected among local entities.  Starting in fiscal year 1992-93 the state shifted $2.5 billion of revenue from counties and other local governments to offset the states reduction of financial assistance to public schools. The County of Sonoma’s transfer is approximately $73 million annually.

Proposition 172
In 1993, the voters approved continuation of a state wide one-half cent sales tax and dedicated the revenue to public safety purposes.  This partially mitigated the effects of the loss of the state transfer of property tax revenue from local governments to balance the State budget.  However, Prop 172 revenues are not available to fund services other than public safety.

Salaries and Benefits
Characteristic of any service provider, labor costs account for a large portion of operating costs.  The county serves over 484,470 residents, and staff costs for services account for more than 55% of the budget.  Changes in benefit costs and the collective bargaining process largely determine level of salary and benefit appropriations.  Twelve separate unions and employee organizations represent Sonoma County employees.

Inflation impacts the purchasing power of the dollar, and changes in population affect revenues and demands for services.  The following graphs and tables present budget data for general and special fund activity over a thirty-six year period.

Inflation increased 434% from fiscal year 70-71³ to fiscal year 07-08, and population increased over 100% during the same time period as shown in the table below.

Expressing expenses, revenues and taxes in constant dollars adjusts for the impact of inflation. When the constant dollar formula is applied to the subsequent years’ dollars using the Consumer Price Index (CPI)⁴, the result is the effective comparison of revenues, expenditures and taxes. To compare the cost per person, the constant dollar is divided by the population for that year.

After applying the CPI index formula and population growth to the 70-71, 80-81, 90-91, 00-01 and 07-08 fiscal years, the result shows that expenditures and revenues have gradually increased from FY 80-81 to FY 07-08 and remain close to FY 70-71. Tax revenue has remained below the FY 70-71 in all subsequent years, primarily due to the shift of property tax revenue to schools.

The following table represents actual dollars budgeted for the same time period.

Note: Total budgeted revenues include total taxes. The table represents the budgeted expenditure, revenue and taxes at the time. The type and scope of services have changed during the period as well as the amounts and sources of revenue. However, responsibility for many new mandated programs have been added, and some services funded previously through general purpose revenues are now entirely supported by fee revenue (enterprise funds).

³ 70-71 is used as the base year for comparison. Each subsequent year is compared to the base year.
⁴ Source: CPI statistics from U. S. Department of Labor, Bureau of Labor Statistics.

County budgets must be balanced-meaning expenditures must equal revenues. In addition, the voters must approve spending obligations beyond one fiscal year. The proposed budget must be approved by July 20 and the final budget adopted by September 30 as required by State law.>

The Budget Calendar

The final adopted budget may be amended during the year for unforeseen revenue and expenditure changes.  The Board of Supervisors can consider proposals for amendments at the weekly Board meetings.  Requests for additional services and/or program improvements are also considered when new or additional revenue is received.  A 4/5 vote is required to appropriate unanticipated revenue or to transfer funds from the contingency budget.  Other transfers or reductions in appropriations may also be considered, which would require a 3/5 vote.

At mid-year and the end of the third quarter, county departments submit an accounting of current activity and an estimate of ending balances in light of this activity.  The County Administrator’s Office analyzes the data, identifying variances and guiding departments to necessary adjustments.

At year-end uncommitted funds or revenue received in excess of budgeted amounts are included in the carry-over balance for the next fiscal year.