Park County has had a highly unusual first half of its fiscal year, with sales tax revenue down but outside federal support flowing into county coffers at unprecedented levels, to the point where the county actually has a surplus.
When the county budgeted for the upcoming fiscal year much was still unknown about the pandemic and the effects it might wage on the economy. Now about seven months into the fiscal year, although revenue is down from the prior year, the overall budget picture is not as dire as predicted.
“My gut tells me we’re going to be all right, which is thanks to the last couple years’ cuts and budget management,” Commissioner Chairman Lee Livingston said.
The county currently has around $4.4 million more in revenue than expenses. This is about a $2.8 million higher balance than last year, but that figure comes with a number of caveats.
“I would say we’re doing truly, about the same (as last year),” Park County Treasurer Barb Poley said.
The county’s current balance comes with $1.9 million from reserves, slotted in place of property-in-lieu-of-taxes revenue carried over into the next budget year.
Park County has been told it will receive a total of $2.3 million in CARES Act funding this year, of which $600,000 will be disbursed to local charities by March. These current numbers do not include about $1.5 million in CARES funds that are being added to the county’s coffers this year.
At this point last year, the county had spent more than $14.8 million in expenses, about $1.1 million more than this year. Park County Commissioner Joe Tilden said the majority of the county’s departments are currently under budget.
“So far we’re doing really well,” Tilden said. “But it’s still early to tell. We won’t be getting (final) info on everything until April.”
A little more than halfway through the year, Park County has spent about 57% of its budget. Revenue on the other hand is at 72% of budget, bringing in about $500,000 more year to date. Those numbers are boosted by PILT and CARES revenue, which Poley said without, would put revenues at closer to 50%.
Poley said ambiguity remains as far as what expenses and revenues await for the remainder of the year.
Through the end of January, the county’s sales and use tax revenues were down 5.3% from the prior year to date. Although sales tax revenues are down 6.7%, use tax revenues are actually up by 10%. Total use tax revenue is only a small drop in the pond, amounting to about 10% of sales tax revenue.
There are some signs of a return to the pre-pandemic economy beginning to show, with January, November and September recording higher sales tax revenue than the year prior. To date, motor vehicle registration and title revenues have been up while property taxes are slightly down, but amount to an insignificant total at this time.
The COVID-19 pandemic was already about three months in when Poley made her projections for the upcoming budget year. She conservatively forecasted sales tax to be down 18.9% and overall revenues to be down 5.1%. Currently, sales and use tax revenue is now exceeding projections by nearly $1 million.
The roughly $1.7 million in CARES Act reimbursement funds the county has been granted this year from the State Lands and Investments Board, although considered reimbursement money for COVID-19 related expenses, can be deposited into reserves, SLIB Director Jenifer Scoggin confirmed. Tilden said this is the plan.
“It’s going to stay in the bank,” he said.
Even if that money was put in the general budget, it could still be considered carryover funds if not spent, and then could be transferred to reserves at the end of the budget year.
Tilden said it’s the long-term budget picture that gives him concern, when the county will no longer be able to rely on pandemic-related federal funding to bolster its finances.
“I’m very concerned about 2022 and 2023,” Tilden said. “It’s looking like we’re going to have some major cuts coming.”
In November, the commissioners voted to cut a $500 contribution to the employees’ insurance health savings account, a $74,725 savings for the county.
Another step in that direction may occur this spring if state legislators choose to reduce direct distribution funding to counties by passing Senate File 64. The legislation would amend the original budget by cutting $10 million from the biennium budget approved last year.
Park County was scheduled to receive $678,016 in direct distribution funding this year. Since the first half of the original biennium budget was already dispersed to the county, this would impact the next three payments, creating a roughly $68,000 annual decrease in funding. The bill passed out of the House Appropriations Committee and is now on General File in the House.
During Tuesday’s meeting, Tilden brought up the proposal of forming a tax-based library district, which would remove the county’s libraries from the county government’s funding umbrella. If approved by the voters, the measure could actually increase funding for the library system, but also likely make their funding more variable from year-to-year. Up until about 15 years ago the libraries took a set fraction of the county’s mill levy. This ended when the county went to a zero-balance budget and started considering the library one of its departments.
During the commissioner meeting Tuesday, the county received a favorable audit report of its 2019-2020 fiscal year from James Lund of Carver, Florek & James, CPAs. Audits analyze an organization’s fiscal efficiency and accuracy rather than decision making about what to do with money.
“You guys did a pretty good job managing its budget for the year,” Lund said.