The coronavirus is squeezing Walworth County government finances by causing fewer people to get marriage licenses, move into the county nursing home or spend time in work-release jail.
County officials have forecast a combined loss of more than $2 million in revenues this year, although officials also are confident that they can manage the fiscal impact of coronavirus.
“We can face the virus,” said County Board member Kathy Ingersoll, a member of the board’s finance committee.
The county has unveiled a proposed 2021 budget totaling $159 million, up from $151 million this year. The county is utilizing an estimated $9 million in cash reserves to avoid staff layoffs or deep program cuts.
County Administrator Mark Luberda also is recommending earmarking $2 million for a new “revenue stabilization” fund to guard against future possible shortfalls.
Luberda said the stabilization program will function like a rainy-day fund in case county government sees possible losses from a continuation of the coronavirus crisis or other outside factors.
“We’ve built that safety net,” he said.
The 11-member county board will take several weeks to examine the new budget proposal, followed by a public hearing and a final decision scheduled for Nov. 10.
Property taxes would increase slightly under the plan, from $59.9 million up to $60.7 million, although an expanded tax base would lower the tax rate from $3.36 to $3.21 per $1,000 of property value.
Ingersoll said although she has not yet studied the budget in detail, she is confident that Walworth County can avoid any major problem from the coronavirus crisis slowing certain revenue sources.
Ingersoll noted that the county has enjoyed a stable financial condition for many years before the public health crisis created disruptions.
“We are ahead of the game in many ways,” she said. “And we will work to stay that way.”
According to a county fiscal analysis, the coronavirus has directly or indirectly hurt county government revenues from many different sources. The report by county staff forecast a total combined loss of $2.3 million for the fiscal year, which ends Dec. 31.
The biggest impact is in health and human services, where decreased admissions at the county nursing home are expected cost the county $510,000, along with $433,000 more in losses in other health programs.
Sales tax revenue is expected to decline $270,000 from reduced consumer spending, although Luberda said he has seen recent signs of improvement in this area.
Other revenue shortfalls include $230,000 in the clerk of court’s office because of reduced court activity; $266,000 in the county sheriff’s office from fewer work-release jail inmates because part of the facility has been closed; and $15,000 in the county clerk’s office because of fewer people seeking marriage licenses.
In land use and resource management, fewer people wanting to sell real estate or make home improvements has resulted in a projected $15,000 loss in land division and erosion control fees.
“We just haven’t seen the volumes,” said Shannon Haydin, deputy director of the department.
In most cases, county officials say they anticipate departments will overcome losses internally without much trouble. For example, the Lakeland Health Care Center nursing home has landed $524,000 in emergency federal funding for coronavirus relief.
Jessica Conley, the county finance director, who developed the revenue shortfall forecast, said individual department heads are trying to compensate, with savings in other areas such as unspent training and training funds.
“We have departments closely watching what will happen in the next couple of months,” Conley said. “We believe any shortfalls at this time can be absorbed.”
Looking ahead to 2021, the county’s new budget proposal includes an $8 million spending increase that includes mostly new capital improvement projects. Capital spending is up from $4.1 million to $11.5 million in the budget proposal.
Luberda said he is recommending that the county spend $2.5 million next year as the first outlay in a county 9-1-1 emergency communications system upgrade that is expected to cost more than $20 million over the next four years.
Another $652,000 would be spent rehabilitating the county jail, a 25-year-old building that will need about $4 million in upgrades in the foreseeable future.
No borrowing is included in the budget, but rather the county is drawing upon healthy cash reserves left behind from previous fiscal years.
Luberda said he is comfortable recommending a spending increase — and robust capital expenditures — regardless of any lingering uncertainty about how the coronavirus will impact county government in the year ahead. He noted that cash reserves are being dedicated to the new revenue stabilization fund.
“It’s just a good strategy,” he said. “Where caution was warranted, we built it in.”
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