By Zach Friend, Supervisor, Second District
In June, the Board of Supervisors passed a placeholder budget to meet our state constitutionally mandated timeline of July 1. The budget was to simply provide a baseline for our upcoming discussions in early August that will provide the true budget for the coming fiscal year.
Our local economy has been hit hard from the impacts of COVID-19, and the County budget will see cuts to address the revenue loss. Sales tax and tourism-related taxes and revenues are down, and unemployment rates remain high in our region and state.
What Cuts Have Been Made?
The County, and local cities in our county, have projected revenue losses totaling tens of millions of dollars.
In anticipation of the continued revenue declines this year, the County worked with employee groups on furloughs. The Board of Supervisors and other executive management took the largest reductions in pay to help reduce impacts to staffing and services and frontline county staff took furloughs of 7.5 percent as well as other cost-saving measures.
These furloughs were essential to maintaining as many staff and programs as possible during this downturn — which has seen revenue losses even greater than in the Great Recession that begin in late 2008 — but will not be enough on their own to eliminate the need for additional cuts. Every department has been providing budgets that provide different cost reduction scenarios from 10-20 percent depending upon actual tax receipts as well as whether any state or federal infusion of funding arrives.
What are the Challenges?
Counties provide critical frontline services needed for the nation’s COVID-19 response and recovery efforts, including public health and safety programs.
Given the increased rates of unemployment coupled with pay reductions for many that are still employed throughout our region, the County has seen a significant increase in the number of safety net program requests (food assistance, housing assistance, health care needs and more). These state and federal programs all require local cost shares/matches from funds that have been reduced by the declines in revenue.
Additionally, public safety (Sheriff’s Office) and public health programs and staff are funded through the same revenue streams that are seeing significant declines — all while costs for the public health and safety response have increased during the pandemic.
What’s Being Done?
Fortunately, the County was already preparing for a potential recession and had made some moves toward ensuring we had a softer landing.
Granted, it wasn’t anticipated that the drop would be this extreme or this sudden but the Board had tripled our reserves to approximately $58 million, improved our credit rating (for lowered borrowing costs if needed), reduced pension obligations and controlled employee growth to minimize costs.
Additionally, we advanced some deferred maintenance work to reduce longer term costs associated with aging buildings and fleets. The reserve, and employee furloughs, will be used to shore up the losses the County has already incurred since March as well as for anticipated revenue losses for the rest of the fiscal year.
Additional reductions throughout the budget to fill the remaining holes will be explored at our hearings in August.
Some funds have been made available from the state’s share of the original CARES Act funding that can also be used by the County for our COVID-related expenses. It doesn’t cover all of our expenses by any stretch but does help mitigate some of the added costs that the County is facing.
Ideally, additional federal funds would be provided to state and local governments to address not just the loss in revenues but significant additional costs in public health related expenses (testing, tracing, treatment).
Such discussions are occurring in Washington, DC right now and a bold program would allow for our County (and for that matter our region and state) to recover more quickly. If not, and if it takes as long as some economists predict it will take to climb out of this downturn, cuts to programs, services and staffing could be greater than what we experienced in the Great Recession ten years ago.
As always, I appreciate any feedback you may have on this (or any other County issue). I’m maintaining regular updates on social media at www.facebook.com/supervisorfriend and during the shelter-in-place order I’m hosting tele-townhalls with County, State and community leaders. If you’re interested in the town halls or just want to connect on an issue you can always call me at 454-2200.
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Editors Note: Furlough days, when county offices will be closed, are Aug. 21 & 28, Sept. 4, Oct. 9 & 30, Nov. 25, Dec. 28-31, Jan. 29, Feb. 5, March 5, April 9, May 14 and June 11. Budget hearings are scheduled Aug. 10-13, concluding Aug. 18.