Sherman R. Frederick
Marinscope
With COVID-19 bearing down on the economy, local governments are scrambling to keep their workforces intact and service levels maintained. It’s a difficult task causing sleepless nights for city managers from Novato to Sausalito.
The biggest deficit comes from the County of Marin, where the Board of Supervisors adopted a $619.7 million budget in June and projected the deficits spiraling down to $35 million in five years depending on the shape of the recovery.
Supervisors requested quarterly updates to work toward closing the projected budget gap.
Budget Manager Bret Uppendahl gave them that update at the Sept. 22 meeting. The news was less than encouraging.
He said the County is working with all 22 County departments to identify permanent reduction options to achieve an ongoing structural balance. County staff plans to return to the Board in November with initial reduction proposals that do not involve staff layoffs.
”There will be hard choices ahead,” said County Administrator Matthew Hymel. “The loss of revenues due to the economic downturn requires us to be proactive and reduce our spending over the next few years.”
The County used reserves and one-time expense reductions to balance this year’s budget, but it is clear that permanent budget reductions will be needed to balance the budget next year.
“It is too early to draw conclusions about the long-term budget outlook,” Uppendahl said, “but we will continue to refine our projections as more data becomes available.”
The County will be balancing its budget at the same time it is spending about $6 million per month on its COVID-19 response. Most of the expenses will be reimbursed by federal and state revenues through the end of the calendar year, but state and federal funding for emergency response is uncertain for 2021.
Uppendahl told the supervisors that it’s likely to get worse before it gets better. The county has experienced “historic declines” in the economy and “the shape of the recovery is the big question.”
Marin has three times more unemployment now that it did a year ago, Uppendahl said, but the county is still one of the lowest in California
He said it’s hard to project the future, but the county hopes to get back to 2019 revenue levels in 2024.
“We have a strong property tax base.”
Uppendahl also underlined an observation from Supervisor Katie Rice.
Marin County’s budget was under stress before COVID.
“COVID made the numbers bigger,” he said.
The 5-year budget projection calls for a $16 million deficit next year and $35 million in year 5. This is a trend facing most other local governments in Marin. The big shortfalls will come in the next fiscal year with potential cascading shortfalls thereafter if the COVID-plagued economy doesn’t turn around.
You can reach writer Sherm Frederick at shermfrederick@gmail.com.
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