$53 Million in Federal Covid Aid Coming
By Zach Friend, Supervisor, Second District
As our county appears to be turning the corner on the pandemic, the economic recovery also appears to be picking up. Over the last year, the local economic impacts of the pandemic have been significant. Many small local businesses have struggled, some closed — and many had to lay off or furlough workers. Local residents struggled to pay rent and overall spending declined. This led to a loss of tax revenue with widespread impacts on the local government budget.
Fortunately, the County had significantly built up reserves over the last few years in anticipation of a potential recession. The County used nearly 30 percent of the available reserves to address the downturn and recent fire and storm related events expended additional contingency funds set aside for emergency repairs and response.
There is a light at the end of the tunnel — a combination of the vaccine, economic improvements and a new federal recovery bill that is providing an infusion of funds to our area.
What Have COVID-19 Costs Been?
Responding to the pandemic — direct County COVID-19 related costs — were more than $130 million. Additionally, the County lost more than $25 million in revenue. Previous state and federal funding efforts have left a $55 million deficit related to COVID-19 costs.
Fortunately, the federal government just passed another relief bill that will provide approximately $53 million to help the County with its budget (as well as additional funding to local cities) to address COVID-19 related costs as well as revenue loss. While this doesn’t fully make up what was lost, it provides a significant infusion that without it would have required cuts over twice those seen during the Great Recession.
County departments are still significantly reducing expenditures, and furloughs of County workers have been continuing, in order to ensure a balanced budget in the coming year.
How Can These Federal Funds Be Used?
According to the legislation, these funds can be used to “respond to or mitigate the public health emergency with respect to the COVID-19 emergency or its negative economic impacts, including assistance to households, small businesses, nonprofits, and impacted industries.”
Some of the acceptable categories include: Providing government services to the extent of the reduction in revenue due to the public health emergency — making necessary investments in water, sewer, or broadband infrastructure and more.
What Is Being Considered?
The federal funds will be provided to the County over a two-year period.
The County is proposing to spend about $25 million on direct COVID-19 related expenditures (some of which are outlined below) and $28 million on revenue loss that will help restore some of the cut programs, services and positions associated with the pandemic.
Some examples of programs and services include continuing the program known as Great Plates Delivered (the senior meals program), providing for non-congregate and expanded shelters, supporting public safety costs such as enhanced decontamination, nursing support, distance learning and housing and reentry support, supporting compliance with California’s SB95 and Families First Coronavirus Response Act for expanded emergency paid sick leave, looking at ways to support broadband expansion, maintaining programs intended to be covered by FEMA but that FEMA may determine are not eligible for cost recovery, supporting continued Parks programs and operations including Distance Learning and Virtual Recreation programs and more (this is just a small sample).
Local Economic Outlook
The good news is that the local economic outlook appears positive. Many state economists believe that steady economic growth in our region is likely as vaccines reopen the economy, consumer confidence increases (and as a result sales taxes increase) and continued low interest rates spur investment, all of which will help .
Hotel tax revenue and other tourism-related revenues are also starting to increase with an expectation that they may return to pre-pandemic levels in the coming year.
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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 you are welcome to call me at 454-2200.