Clark County is expecting to lose between $5 million and $13 million in general-fund revenue as a result of the novel coronavirus pandemic.
When Washington’s statewide stay-at-home order went into effect in March, the county began formulating several expense reductions. That included a hiring freeze, the elimination of nonessential spending and overtime and the halting of some general fund projects.
The county has carved out roughly $4 million in savings so far, primarily through personnel vacancies and project delays. County departments are drafting expense reduction scenarios at 2 percent, 3 percent and 5 percent from June through August.
The county finance team consisting of Interim County Manager Kathleen Otto, Finance Director Mark Gassaway, Deputy Treasurer Sara Lowe and Budget Director Emily Zwetzig plans to adjust revenue forecasts on a weekly basis.
“The county has chosen to take a methodical approach during this unprecedented time,” Otto said. “It’s a balancing act — the county doesn’t want to ‘over-cut’ in the beginning, but we need to be ready to respond and implement immediately. The goal is to minimize impact to services.”
The county has just over $181 million in its general fund out of the $545 million total budget approved by the County Council in November. Revenue reductions are expected to be minor relative to municipalities like Vancouver, which expects as much as a 40-percent hit to its general fund.
One-third of the county’s general fund revenue comes from sales taxes, which have been severely impacted by business closures. The county doesn’t typically see those revenues for two months, so the most accurate figures won’t be known for weeks.
Initial data reported by the state Department of Revenue, however, revealed that March sales tax activity was down 21 percent, Otto said. Because the shutdown began in the middle of that month, figures for April and May should be more representative of the actual sales tax impact.
Intergovernmental billings and fees for service have also led to the decline, Otto said. Property tax revenues have been steady to this point, but county officials will continue to monitor ahead of deadline, which was extended to June 3.
Staff layoffs possible
The county has avoided staff layoffs so far, but a reduction in staffing levels remains a possibility, Otto said.
A large segment of county staffers are working remotely, causing slight savings on expenses such as electricity and paper in county offices.
“A little bit of reduction is happening just because there aren’t as many people in the building,” Clark County Council Chair Eileen Quiring said.
Quiring said that she has faith in the accuracy of the finance team’s projections.
“Hopefully, we’re being realistic, but I do believe that we are,” Quiring said. “They look at this carefully, and I hope they’re right.”
The county expects to receive $26.8 million in funding through the CARES Act. That funding, however, cannot be used to negate revenue losses, Otto said.