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All data sources are listed in the section Data Sources and Downloads.
Highest Interest Expense in California
(by share of budget)
Interest Expenses as Percent of County Budgets
As of 2003 (latest comparative info available from State Controller), the County of Mendocino paid
a far higher percentage of its budget as interest expense than any other
California county – nearly twice as much as Orange County (still paying off its bankruptcy obligations of a decade ago) and five times more than average. (Counties Annual Report).
Mendocino County's interest expense consumed 4.7 of its budget in 2003. The next six counties had interest expense from 2.8% down to 2.0%, Orange, San Diego, Sacramento, Riverside, Contra Costa, and Stanislaus. The average percentage that interests takes of county budgets in California is 0.9%.
County officials say they have no choice about how most of the County's budget
is spent because of various requirements from the State and Federal
Governments. In 2003, out of a $165 million budget, our County Supervisors
were able to decide how to spend maybe between $20 to $30 million or so. Of
that, nearly $7 million (between 25% to 35%) was paid out as interest.
Future Debt Service Payments
Annual Debt Service (payments of both principal and interest) for the Pension Obligation Bonds is scheduled to extend into the 2025 to 2029 period, while the Certificates of Participation/Leases extend five years beyond that. As the payment schedules stood a year ago, we will be paying about $10 Million a year in debt service towards these obligations for the next 23 years.
Click here to see the
County's Debt Service Schedule.
The Cost of Excessive Interest Expense and Increased Staff Expenses
Our County's interest expense consumes 5 times more of a share of our County Budget than the average for counties in the state. If we had an average interest percentage, instead of nearly $7 Million in yearly interest, we'd pay paying only $1.3 Million. We'd have an additional $5.7 Million a year to spend on other things.
If County Staff consumed the same share of budget as ten years ago (3/4 today v. 2/3 a decade ago), instead of the $94 Million for all staff expenses in the current budget, we'd be paying out around $77 Million. We'd have an additional $13 million a year to spend on other things.
Just these two would provide our County $18 Million to $20 Million additional funding this year.
This money could have, and should have been used for things like:
- providing services to working families and those on fixed incomes;
- paving some of our $95 Million backlog of poor condition County roads;
- buying library books and supporting the library;
- economic development programs;
- providing our share of the construction costs of a new jail.
Instead, the interest is being paid to investment banks and bond investors, and the extra staff costs make County staff incomes and benefits much higher than the rest of the community.
Click to go to next page, The Fundamental Problem – Loss of Our Economic Foundation.
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