Bellingham council hears economic update. Here’s what to expect for the 2021-22 budget
Bellingham is facing a budget shortfall of about 8% from an economic downturn caused by the new coronavirus pandemic, the city’s finance officials said.
“It’s very likely that almost every single budget across the board is going to have a reduction,” said Councilwoman Pinky Vargas, who heads the City Council’s Finance and Economic Development Committee.
“We’re all going to have to cut. Reductions are going to come from everywhere,” Vargas said during a City Council meeting Monday night, Aug. 31.
It’s unclear how deep the budget cuts will go, because the 2021-22 budget is still being prepared and revenue figures are about two months behind, officials said during a committee meeting Monday afternoon.
Finance Director Andy Asbjornson and Deputy Finance Director Forrest Longman offered a glimpse at where Bellingham stands financially during a presentation to the committee.
Figures represent data through June, or about three-quarters of the way through Bellingham’s two-year budget cycle.
Overall revenues of $154 million are down by about $7 million from 2019, or 8%, and overall expenses are at $147 million, Asbjorson said.
General Fund revenues are at $49.8 million, with spending of $50.2 million.
The biggest financial hits were from sales taxes, Business and Occupation taxes, and utility taxes and fines, Asbjornson said. Other revenue shortfalls include fees from Parks Department programs and court fees.
Bellingham’s revised 2020 budget is $92.7 million, according to a report to the Bellingham City Council on May 18.
That includes $2 million in budget cuts affecting nearly every city department that Mayor Seth Fleetwood sought and the City Council approved.
Longman said the budget will be presented Oct. 1, and it’s too early to speculate about specific cuts, including layoffs.
“Everyone has been working hard to reduce costs, and we expect that will continue,” Longman said. “We will have to take some sort of action for 2021-2022, but that’s still being developed.”
Meanwhile, the city will be forced to tap its budget reserves. The General Fund alone had a surplus of $19.6 million, according to the 2019-2020 adopted budget.
“We’ve been fortunate due to good financial management by the council and previous administrations to start this with a good reserve, and we’ll have to maintain that tight-belt attitude going onto this budget season,” Longman said.
