The Clark County Council has passed a $557 million annual budget for 2021 that stresses “flexibility” due to economic uncertainty from COVID-19.
The spending plan is roughly $11 million more than the one approved by the council for this year. However, it’s about $37 million less than the updated 2020 budget, which includes the recently adopted fall supplemental budget and money spent from federal CARES Act funding in response to the local COVID-19 outbreak.
The county is estimating about $6 million in lost revenue in 2020 due to the pandemic, Interim County Manager Kathleen Otto said. The revenue decline stems largely from a reduction in sales tax revenue.
Otto also said that county departments have taken several measures, such as overtime expense reductions and a hiring freeze, to cut $8 million in expenses for this year.
For 2021, Otto recommended 124 of 209 budget requests submitted by county departments. Otto also asked each department head to submit 8-percent reduction scenarios in case of additional revenue losses.
“That’s something we learned this year,” Otto said Tuesday during a budget hearing before the council approved the budget. “We need to maintain flexibility to respond as we are faced with different challenges, unfortunately multiple times this year, and continue to face those moving forward.”
The county annually grapples with a structural deficit as expenses outpace revenue due to greater service demands, aging technology and infrastructure and rising employee salaries and benefits. By 2021, total annual expenses are projected to outpace revenue by nearly $12 million.
Otto said that over two-thirds of projected expenditures are related to personnel. By the end of last year, the county was funding 1,621 full-time positions.
Clark County, which borders the state of Oregon, which does not impose sales taxes, ranks 18th of 39 Washington counties in sales tax revenue per capita. County officials say that if the revenue matched the average in Washington in 2019 alone, Clark County would have seen an additional $12.7 million in revenue.
Tax increases
The council on Tuesday also approved general and road fund property tax increases of 0.602 percent. Combined, those tax hikes will cost owners of median-priced $389,900 homes an additional $5.23 next year.
As had happened in the previous budget cycle, the tax increases were approved by a 3-2 majority of the council, with Council Chair Eileen Quiring O’Brien and Councilor Gary Medvigy voting against them.
“If we don’t raise property taxes, we will still balance the budget, and we will do so without diminishing services,” Medvigy said, adding that he didn’t wish to place additional tax burdens on county residents given financial hardships due to COVID-19. “We are in a pandemic. We are in it, and we don’t know when we’re coming out of it.”
State law limits taxing districts to 1-percent property tax increases each year.
Prior to the 2020 budget approval, the council had decided against the general fund tax increase in five of the previous eight years, and against the road fund tax increase in eight of the previous 10 years. Those increases would have added $18.5 million to the general fund and $20.5 million to the road fund.
Councilor Julie Olson noted that the 1-percent increase was approved by Washington voters in 2001.
“There’s no pushback on this small amount that (taxpayers) contribute to fund county services” Councilor Julie Olson said. “This is just basic, responsible governing here.”
