Bellingham, Whatcom ready 2021-2022 budgets amid economic uncertainty of COVID crisis
Fiscal effects of the new coronavirus pandemic continue to weigh on Bellingham and Whatcom County officials as they develop spending plans for the 2021-2022 budget cycle.
Bellingham City Council members heard an ominous report that detailed the possibility of sharply declining revenues at a committee meeting Monday, May 18, and the Whatcom County Council set a special meeting Tuesday, May 26, to discuss budget priorities.
Forrest Longman, Bellingham’s deputy finance director, told the City Council on Monday that it could be several weeks before data such as tax collection figures will be available.
“It makes it very difficult to create a reliable forecast when we have a constantly changing environment,” Longman said. “We don’t even know the full impact of the shutdown at this point. We can’t even develop a trend.”
Revenues from sales and business taxes are declining because of statewide business closures and other actions that Gov. Jay Inslee took to limit the spread of COVID-19.
Cancellation of popular events that provided revenue to governments and local businesses, such as the Ski to Sea race and the summertime Downtown Sounds concert series, have hit the local economy hard.
Both Bellingham Mayor Seth Fleetwood and Whatcom County Executive Satpal SIdhu recently froze hiring and took other steps to reduce the immediate impact of expected budget shortfalls.
County Council meets Tuesday
County Council members will meet in a special online session Tuesday to address budget priorities that Sidhu listed Friday, May 15.
“It may take several months to know the actual impacts on our revenues as we address urgent issues of health and life safety,” Sidhu wrote in a budget memo to the council.
He warned that more budget tightening is possible, but that he was optimistic about an eventual recovery.
“While it is not guaranteed, we are hopeful that the economy will steadily improve over the next 12 to 18 months and the county will receive financial incentives from our state and federal governments,” he wrote.
Sidhu wrote that key budget considerations for 2021-2022 are:
▪ Ensuring the county’s fiscal health.
▪ Maintaining reasonable levels of service.
▪ Protecting county assets and improving efficiency.
▪ Supporting the public health system.
▪ Maintaining the Regional Economic Partnership with Bellingham and the Port.
▪ Developing capital improvement projects.
▪ Improving housing affordability.
▪ Addressing wetlands, climate change and water-rights issues.
▪ Expanding the county’s relationship with the neighboring Lummi and Nooksack tribal governments.
▪ Ensuring civil conversations in regard to controversial issues.
Bellingham will see losses
Bellingham’s general fund budget could see a drop of $7.6 million or 9% this year, said Deputy Finance Director Forrest Longman In a Monday presentation to the Bellingham City Council.
Longman said that businesses most heavily affected by closures and other restrictions that started March 24 include retail stores, hotels, restaurants and the construction industry.
They provide more than 75% of the city’s sales tax revenue, he said.
Bellingham’s revised 2020 budget is $92.7 million, according to a report to the Bellingham City Council on Monday, May 18.
That includes $2 million in budget cuts affecting nearly every city department that Fleetwood sought and the City Council approved Monday.
“(Our) 2021 revenues will depend heavily on how the economy rebounds from the extended shutdown and whether there are future outbreaks,” Longman said.
Longman said city departments are preparing their next two-year budgets with reduced expenses in mind.
“There are structural problems with the economy, but as most economists like to say, it’s fairly sound outside this crisis,” he said.
