As our immediate focus is on COVID-19, we can’t overlook that we are in the middle of Spotsylvania County’s budget process. The current health situation should illuminate the importance of local government, which is responsible for providing the most crucial services to our community. It should also highlight how wholesale and arbitrary spending cuts reflect poor and lazy governance, not a prudent one.
A recent Free Lance-Star article provided insights from several Board members, which gave the impression that the Board is moving toward adopting the equalized tax rate or lower in these uncertain times. This would eliminate almost all new initiatives, to include a Public Safety pay increase the Board already approved last year. To some this may seem like a sensible course of action, however, if you had been following the budget process, support for these new initiatives prior to the negative economic impacts of COVID-19 were lukewarm at best from several supervisors.
It would be unwise to move forward with the budget with a complete disregard for the future impacts posed by business shutdowns and layoffs. Likewise it would be equally unwise to not consider whether some of these new initiatives will be needed even more if the COVID-19 crisis becomes even more prolonged or how some areas of the County maybe reducing expenditures through modified operations, which would compensate for at least some of the anticipated tax revenue loss.
At the March 17th Board of Supervisors emergency session, the County’s Chief Financial Officer reported that if the sales/meals/occupancy tax revenue between March-June 2020 fell by 50% that the County would not receive close to $7 million in expected revenue. Considering mandated closures and reduced foot traffic to businesses this is a possibility that needs to be seriously planned for as the current budget is developed and adopted.
At the March 17th meeting, the Board authorized County staff to halt all non-emergency related discretionary spending and pause Capital Projects that have not already started construction. These are immediate efforts to provide flexibility as the County monitors the negative impacts of COVID-19 to the local economy, which adversely effects tax revenue.
As it currently stands, the Fiscal Year 2021 equalized tax rate is .81 cents without identifying funding for the Public Safety pay increase, which has already been partially funded since January 1, 2020. If the Board does not fund that $8 million portion of the County Administrator’s recommended budget, Public Safety personnel would not receive the pay increases they were promised - while being asked to serve the community under the current health crisis, which the community should find unacceptable.
In addition, the Board should not ignore other areas of the County that are in need for additional personnel that will likely be needed more than ever during the COVID-19 crisis and beyond.
A balanced approach will certainly require some conservative approaches, some of which the County has already taken, by delaying Capital Projects and halting non-emergency discretionary spending. Additionally, some new initiatives will have to be scaled back, but some should be given serious consideration especially for those Departments that are already identified as understaffed and whose jobs are on the front lines of dealing with the current crisis.
Some Board members may argue that we need to be extremely conservative because we don’t know what the future holds. Some have already advocated cuts to all new initiatives, halting all projects, and introducing hiring freezes. However, the Board has put themselves on firmer footing to deal with local emergencies by adopting fiscal policies that created a Budget Stabilization Reserve and Fiscal Stability Reserve to deal with this exact scenario. The Budget Stabilization Reserve includes around $5 million “to address potential revenue declines or other economic stress placed on the budget.” The Fiscal Stability Reserve includes reportedly $60 million “to meet a critical, unexpected financial need costing at least $1,000,000 and resulting from a natural disaster or declared state of emergency, or from a local catastrophe (e.g. a fire at the business of one of the County’s top 10 revenue generators) that cannot be resolved through other less extraordinary budgetary action.” Although using these funds is not a desirable option, if we cannot rely on them in the current situation than we should ask why such funds are being maintained in the first place.
On March 17th, the Board voted 7-0 to declare a local State of Emergency, which would presumably permit the use of both the Budget Stabilization Reserve and Fiscal Stability Reserve funds. I do not believe that these should be factored into the budget process, but they should allow for some calculated risks to be taken with budget decisions.
The way forward will require leadership and a balanced approach to this year’s budget process. The negative affects of COVID-19 could last many more months. The approach the Board takes must balance the anticipated needs of the community to get us through the crisis and reducing expenditures.
If the response to this crisis is to just arbitrarily slash the tax rate with complete disregard for maintaining government services, we don’t need elected officials to make those type of decisions. We could get along all the same by relying on predetermined formulas and strategies and just input societal conditions and follow the programs prescribed recommendation. More than ever we need transparency, careful deliberation, and a willingness to work the process, to put the County in a position to effectively manage this current situation.
The County’s budget documents can be found here.
Spotsyvania County Public School budget documents can be found here.