Whatcom executive outlines budget cuts caused by coronavirus uncertainty
Whatcom County Executive Satpal Sidhu announced preliminary budget-tightening measures Tuesday in the face of expected lost tax revenue from the economic downturn caused by business closings and other measures aimed at fighting the new coronavirus pandemic.
First cost-saving steps include a selective hiring freeze, postponement of some existing contracts, a 10% reduction of supply purchases, a 5% cut in discretionary spending, and savings on personnel expenses through schedule adjustments, Sidhu told the Whatcom County Council in a briefing Tuesday.
“We learned from the last recession that the quicker we act in a fiscally prudent manner with cost reductions, the better financial health we will have in the long term,” Sidhu said.
He emphasized that the county’s budget situation remains dynamic and new information could change current projections significantly.
“While the economy idles, we are immediately implementing measures designed to decrease operating costs,” Sidhu said.
Property taxes, sales and use taxes, excise taxes and timber harvest taxes are main sources of revenues — totaling 48% of the budget — and the county also relies on business and occupation taxes as well as other business fees.
Revenue from these taxes is expected to decrease as the effects of business closures and job losses ripple through the economy.
Treasurer Steve Oliver told The Bellingham Herald in an email on Wednesday, April 15, that he, county Finance Director Brad Bennett, and Deputy Executive Tyler Schroeder are taking a hard look at revising the county’s $437 million 2019-2020 budget with respect to funding loss and extra expenses related to local COVID-19 pandemic response.
Income that the county receives from fees and taxes could drop between 10% and 25%, depending on the source, according to projections that Sidhu showed during Tuesday’s council meeting, which was conducted online.
“This is basically the playbook from the last recession,” Bennett said during Tuesday’s meeting. “We’re taking all the actions that we took in the last recession at this point.”
