Hamilton County's administrator and budget director are asking departments and the county's elected officials to take steps to prepare for a budget shortfall because of the COVID-19 crisis.
Budget Director John Bruggen sent an e-mail to officials Monday.
"There is no question that the COVID-19 crisis will also substantially affect county resources, and we may not have any good understanding of the impact for weeks or months," Bruggen wrote.
Bruggen and County Administrator Jeff Aluotto are asking departments and offices to take several steps:
- Immediate hiring freeze
- Immediate freeze on new contracts
- Requesting agencies to look for ways to cut up to 20% of their budgets
"The looming budget crisis is driven by multiple factors, including the precipitous drop in income from the loss of economic activity in the county, and increased expenditures for battling the virus," Bruggen wrote. "We have modeled sales tax losses of as much as 70% over certain months, that could amount to $20-30 million in lost general fund revenue across the year."
Aluotto sent a memo Friday that said the economic slowdown came just as the county's fund balances were strong and major revenue sources were growing. He said that would have allowed the county to invest in many important programs.
"Unfortunately, I can say with a high degree of certainty that the current economic shut down will impact county revenues in a manner which will prevent us from making many of these investments this year," Aluotto wrote.
The county is using different models to try and determine what the financial impact will be on county revenues.
"At this point, presuming a third and fourth quarter economic rebound, we are projecting sales tax losses of as much as $20 million compared to budget," Aluotto wrote. "To be clear, I am anticipating that the current COVID-19 crisis will pass; and that there will be a recovery. I am not, however, anticipating that the recovery will happen, in total, this year and in a manner that leaves our general fund budget unscathed."
County leaders say they'll work to get the county's share of federal and state funds to address COVID-19 expenses, although right now there are no proposals to help the county with lost local revenues.
Bruggen also said the budget office needs input from departments on the following items:
- The impact on your departmental revenue streams
- The impact on your programmatic activities
- New expenses during 2020 that you can delay or discontinue
- Additional actions you can take to reduce expenses by as much as 20% from 2019 expense levels
County analysts are beginning work this week on projections, and Bruggen is asking for county departments and offices to provide as much information as possible by next week.
