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Knowing when or if a slump in the economy is coming could save you a lot of financial pain and suffering. But how do you really know?

Things look pretty good at the moment. U.S. unemployment is the lowest it’s been in nearly two decades. The stock markets bounce around, as they always do, but the recent trend is up, up, up. Consumer confidence is sky-high. Just look at holiday spending so far.

But diligent detectives are always looking for solid clues, and here are a few to consider with regard to the nation’s overall economic health:

A major U.S. car maker, General Motors, this week announced it is shutting down production at five plants and laying off about 15,000 members of its work force. Not good news just before Christmas. Banking experts say the housing market is cooling off, and the post-2012 housing boom is officially over. Interest rates, including the most popular mortgage rates, are increasing. It’s slow but steady.

And here’s where the rubber hits the road for most of us — local governments start warning folks that belt-tightening may be on the horizon, and to expect changes, maybe higher fees and taxes, or reduced services and programs.

That was the message last week when Santa Barbara County finance officials briefed the Board of Supervisors on what to expect in the next fiscal year and beyond. The general forecast is for a relatively sunny and mild 2019-20, but starting to cloud up in 2020-21. Here’s the gist of the report:

The fiscal gurus said the county is in its ninth consecutive year of growth with regard to discretionary revenue, and modest growth is expected to continue through next fiscal year, which would end with a surplus of $3.5 million in the General Fund, and a net after other expenses of $1.2 million. Sounds OK.

What doesn’t sound so good is the experts’ belief that if a recession slides in during the 2020-21 period, as expected, the deficit for all funds combined could hit $9.7 million in 2020-21, and mushroom to $28.1 million in 2023-24, according to a five-year financial forecast.

As always, the key word in that last paragraph is “if,” as in if a recession does happen.

The report wasn’t necessarily a sky-is-falling scenario for board members, but a heads-up to what could occur under certain circumstances. It is important for our county’s elected leaders to think along those lines, because they are charged with the responsibility of making hard decisions on spending, and they have to do this while flying blind, because what they are preparing for has not yet happened, and may or may not happen.

Because, if the board does not act prudently concerning future fiscal matters, it could spell disaster for those board members politically, but more importantly it could have dire implications for county residents.

Planning for things that have not yet happened may be a fun parlor game, but it can be a nightmare for elected officials at every level of government, because all sorts of unexpected things can, and usually do happen.

For example, the county has factored in projected expenses of operating the North County Jail, but those numbers are subject to change — and the change is almost always on the more-expensive side. There’s also the probability of natural disasters that cost the county millions. And there was no mention of the county’s unfunded pension liability at last week’s session.

Let the planning begin, for everyone's sake.

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