If needed, Douglas County has ‘significant’ amount of funds it can use to help it through pandemic shortfalls

photo by: Jackson Barton

The Douglas County Courthouse and downtown Lawrence are pictured in an aerial photo Saturday, July 13, 2019.

If the economic downturn associated with the ongoing coronavirus pandemic affects Douglas County’s tax revenues, it has cash on hand to help it get through the current budget year.

But how a decrease in those revenues may affect the county’s budget in the years to come is not yet known.

County Administrator Sarah Plinsky recently told the County Commission that its general fund budget includes a portion of unallocated money, also known as reserve funds, that could be used to make up for a revenue shortfall during the current budget year.

But when the commission considers crafting the 2021 budget later this summer, they may need to make tough decisions, such as cutting back spending.

Plinsky told the commissioners during their May 20 meeting that the county won’t have a good idea of how the pandemic has affected its finances until June, when it will have an estimate of revenue to be used for the 2021 budget year and a re-estimate of revenue that will be available for the current budget year.

“We don’t have a good sense of where revenues are going to come in,” Plinsky said on May 20. “It does make me nervous,” she added.

The re-estimate for the 2020 budget year will be important, as the county scheduled sales tax revenues collected this spring to be used later in the year. Plinsky told the Journal-World she anticipates those revenues won’t reach the projections the county set for those funds when it crafted the 2020 budget last year.

But she assured the commissioners the county budget currently has approximately $2.2 million, or about 4% of the general fund budget, to cover additional costs or shortfalls from the pandemic. Additionally, Plinsky said the county has a “significant” amount of cash in its equipment reserve and capital improvement plan funds. Those funds — which make up $10 million and $22.3 million, respectively — are earmarked for future projects, but could be reassigned if needed, she said.

“The financial standpoint of the county is very secure,” Plinsky told the commissioners. “I don’t want to make it sound like we aren’t financially stable … (but) I want us to be cautious before we dip deeply into our general fund reserves.”

The county does have some large projects planned for the near future, including the $29.6 million expansion of its jail. When the plan was approved in January, Plinsky said the county has up to $9 million of cash on hand to initially put toward the project. But whether a dip in revenues will affect those plans aren’t clear. When asked if projects like the jail could be put on hold because of a dip in revenue, Plinsky said couldn’t answer that yet.

Plinsky later told the Journal-World the commissioners could also choose to reallocate funding in its operating budget, such as using funds that were originally scheduled to provide services that have been suspended during the pandemic.

“They could say ‘we’re not spending this money over here because of the pandemic, so let’s move that money over here,” she said.

The discussion was brought up after the county approved providing $100,000 of additional funds to Just Food, a local food bank, to help the organization feed Douglas County residents during the pandemic. Commission Chair Patrick Kelly asked if the county expected more requests for such funding from outside agencies, noting he was surprised the commission hadn’t already seen more requests related to emergencies caused by the pandemic.

Plinsky said she wasn’t sure if there will be future needs from the community, but she noted some of the costs to the county related to COVID-19 could be reimbursed through federal grants.

Moving forward, it is currently unclear how the county may need to adjust its finances in the 2021 budget to deal with the revenue shortfalls. The commissioners would have options to make up shortfalls in revenue for the 2021 budget, such as cutting future spending or raising taxes.

However, Plinsky told the Journal-World that the commissioners will not begin to consider such decisions until she presents the revenue forecast in June. The commissioners typically craft the budget in July and August.

In an email to the Journal-World, Commissioner Michelle Derusseau agreed the commission will discuss those possibilities when more information is available.

“Until we receive information on the impact of the pandemic and it is discussed in a public meeting, there aren’t any plans,” Derusseau said. “Once we have all the information, including options, then we will discuss how to proceed.”

A decrease in tax revenue is likely. At the state level, a steep decline in tax revenue has already been projected. The state announced in April it expected to see a shortfall of $653 million in revenue by the end of June 2021.

But that does not necessarily mean the county will face a similar steep decline. Plinsky said the county won’t know how its revenues will be affected until the estimates are finalized in June.

Contact Dylan Lysen

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