Montgomery County commissioners will consider declaring a fiscal emergency brought on by the expected loss of $20 million in tax revenues caused by the coronavirus pandemic.
The county will slice the current general fund budget $17.9 million if commissioners approve the emergency measure on Tuesday’s agenda.
But the proposed cuts only account for a short-term downturn, said Montgomery County Commission President Judy Dodge.
“This could could just be a temporary $20 million … But in another couple of months, it could be more and more millions of dollars. So we’re just going to have to tighten our belts,” she said. “Whether you’re a business or government, we’re all faced with very difficult decisions coming at us.”
Cascading business shutdowns and decreased economic activity will blunt revenue otherwise flowing from sales taxes, property taxes, casino taxes, local government funds and fees paid for services, according to the county.
Sales tax revenues bring in a little more than $100 million a year, or $8.5 million a month, said Montgomery County Administrator Michael Colbert.
“We know the March sales tax, the April sales tax are going to be drastically hit,” he said.
Sales tax revenues generally reach the county about three months after collection, Colbert said.
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A hiring freeze would absorb about $7 million of the total expected shortfall, according to the resolution.
The resolution shows nearly $11 million in budget cuts in the following areas:
Strategic community projects/grants, $1,000,000
Alternatives to incarceration, $1,000,000
Economic Development and Government Equity program grants, $1,250,000
Security and improvements, $2,000,000
County Jail and improvements, $2,000,000
Building improvements, $3,400,000
Passage of the resolution would also temporarily freeze travel, saving $250,000.
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The resolution also recommends that elected officials also restrict hiring to essential personnel for the foreseeable future.
Cuts would be made in the county’s $181 million general fund budget. The county’s overall approved 2020 budget was set at $914 million.
But the county has weathered past downturns, including the Great Recession beginning in 2007, Dodge said.
“We’ve been through it before and we’re going to get through this,” she said. “Our main concern is we have to have a responsible and balanced budget.”
Money to take care of the county’s roads and bridges, which come partly from gas tax revenue and license fees, will also dwindle, said Paul Gruner, Montgomery County engineer.
“We’re definitely going to see a slowdown in the gas tax revenues,” Gruner said last week. “We won’t see that for a couple of months because there’s a lag.”
Gruner said less consumption affects revenues. Ohio adds a tax of 38.5 cents per gallon of gas and 47 cents per gallon of diesel.
Gruner said necessary repairs will still be made to roadways, but other projects may be set behind and expenses cut.