Whitman County officials have started planning for significant spending cuts as early estimates project a nearly 19 percent, or approximately $600,000, decrease in sales tax revenue for the year due to COVID-19 closures.
County commissioners acknowledged a difficult road ahead during budget discussions on Monday. The length of the closure and additional costs from responding to the public safety threat of the virus could continue to increase the strain on local budgets.
“We’re going to have to be pretty tight-fisted to say the least,” Commissioner Michael Largent said. “This is not going to be fun times.”
In recent years, commissioners have set aside $150,000 in each budget to pay for unexpected operating costs. Commissioners on Monday approved an approximately $170,000 budget amendment for salary increases and other operating expenses incurred before factoring in any COVID-19 impacts.
“We’ve already used our budget reserve for the year,” Commissioner Art Swannack noted.
The new budget amendment includes salary and benefit increases for the Information Technology department, the Auditor’s office and Superior Court. Officials also approved $85,000 for the county Building Division, explaining that permitting fees have not kept up with the department’s operating costs.
Administrative Services Director Gary Petrovich said the county should be in a better position to weather the COVID-19 closures than other counties that rely more heavily on sales tax revenue, but the effects were still difficult to predict with any precision.
“There’s a lot of moving pieces on this,” he said.
Based on early numbers, Petrovich has started preparing to lose about $600,000 from the previously projected $3.2 million in sales tax revenue in the county’s 2020 budget. Those figures could still go up or down depending on the length of the shutdown. The county budgeted about $17.1 million in total General Fund spending for the year.
After meeting with all 23 departments at the county, Petrovich said he had tentatively identified about $338,000 in budget cuts to help close that gap. (Update on May 1 with details here.)
“We’re making some really good headway,” he said, adding, “Everyone knows it’s an issue.”
The county may end up drawing more money from long-term reserves, but Petrovich said the county remained in a much better position financially than if they had faced similar issues five or six years ago.
Other counties have started preparing plans for employee layoffs or furloughs. Petrovich said Whitman County had so far kept personnel on payroll, mostly working from home or with social distancing protections. A “handful” of employees had been placed on paid administrative leave.
Petrovich, who has led the county’s budget process for several years, also recently submitted his resignation. He will start as chief budget officer for Spokane County next month.
County commissioners thanked Petrovich for his work and planned to discuss whether they would immediately replace his position or spread his duties out to other departments.
Swannack suggested discussing the matter with other managers before making a decision. Largent noted the county may end up needing the cost savings from leaving the position vacant.
“With every crisis, there are some opportunities,” Largent said. “We’re going to be scrambling for every nickel.”