Spokane County Commissioners are faced with an $11 million budget shortfall for the 2021 fiscal year that they hope to shrink with early retirements, some cuts and potentially dipping into reserves.
Spokane County Commissioners and the public saw the preliminary 2021 budget for the first time Tuesday afternoon during a public hearing. Chief Budget Officer Gary Petrovich said the numbers he presented were preliminary, and the revenue estimates for next year were conservative and could change over the next few months.
The total budget for the county is $657.7 million, and the general fund expenditures are expected to be around $202 million. Spokane County budget staff estimated there would be about $191 million in general fund revenues.
In comparison, the 2020 general fund budget had around $208 million in revenues and expenses.
Petrovich said this year’s budget included every department’s entire request and, over the next few weeks, he will meet with department leaders and ask them to only focus on the items they need.
“I definitely think there is a lot of room for negotiating for lower expenditures,” he said.
Petrovich said the process is also a little later than normal because of new software the county is using and challenges caused by the pandemic. He said county budget staff are still analyzing the budget information they collected from every county department and are bringing in more data to update projections.
He estimated there would be around a $1 million reduction in sales tax, reductions in revenue for the services the county does for other cities, such as law enforcement, and lower revenue in other areas.
He said it’s also challenging to compare the general fund budget to last year’s because the commissioners moved $12 million they receive in revenue and from mental health sales taxes and the expenditures those funds are used for out of the general fund, and made a few other accounting changes.
Commissioner Mary Kuney said she wanted to wait for Petrovich to discuss reducing different county departments’ individual budgets before considering larger cuts. She said she’s also hopeful that some of the other precautions the county took to reduce its expenses over the next few years, such as an early retirement window that recently closed, will reduce employee costs.
Petrovich said he’s waiting to hear from department leaders to find out if the county can eliminate or wait to fill some of positions held by departing county retirees.
County Commissioner Al French said he’s also hopeful the retirement program will reduce costs and that county departments will voluntarily reduce their budget requests.
He said he anticipates that the commissioners will also need the 1% increase in property tax revenue they are allowed to take under state law. He said if the 1% and other cuts aren’t enough and the county still needs more funds to cover essential services, they may need to dip into reserves.
“That’s why you have reserves, to cover these unexpected events like a pandemic,” French said.
Kerns, who has opposed the 1% increase in the past, said a lot of community members are struggling financially and he hopes to find a way to balance the budget without taking an increase in property taxes.
“It will be my goal to find a way to avoid that,” he said.
Kuney said she hoped to not take the 1%, and both Kuney and Kerns said they would prefer not to dip into reserves. Kuney called reserves a “last resort,” and both commissioners said if commissioners do have to dip into those funds to balance the budget, it should only be for one-time costs and not ongoing expenses, such as payroll.
“I think we need to live within our means and go from that perspective,” Kuney said.
The county’s last major shortfall was a $9.4 million deficit in 2017. The county cut $400,000 in funding to the Spokane Regional Health District and reduced funding for district court and the prosecutor’s office. It also used funding meant for road construction to cover operating expenses. Kuney and French voted for that budget and Kerns opposed it.
Kuney said she hopes the county commissioners won’t have to take as drastic actions to balance next year’s budget and will find other ways to reduce expenditures.
“We may have to make some cuts, but I don’t think it will be like it was in 2017,” she said.
Petrovich said as the county gathers more data and asks county departments to reduce their requests, the shortfall may shrink. He said the commissioners likely would not vote on the budget until December and there will be several public hearings where the public can chime in.
The next public budget round table is Oct. 27 at 2 p.m. The public can view the meeting on the county’s YouTube channel or call into the meeting at 509-477-4050 and use the code 330641.