SLO the virus

COVID-19’s financial impact on local governments is becoming clear as jurisdictions release their proposed budgets for the upcoming fiscal year.

Santa Barbara County is estimating a $52.4 million hit from the pandemic through both revenue losses and additional costs during the ongoing and upcoming fiscal years, according to a summary prepared by the Santa Barbara County Executive Office.

However, the executive office is proposing that the county Board of Supervisors approve a “status quo” budget that maintains the county’s current level of services to the extent possible. This means that most departments wouldn’t experience a reduction or expansion from their current levels. The Board of Supervisors will vote on it during the June 9 meeting.

“We are facing an unprecedented emergency where counties are on the front lines, not just in regard to public health, but other critical safety net, emergency, and public safety services,” County Executive Officer Mona Miyasato said in a press release the county issued on June 2. “Our goal is to maintain essential services needed most by our communities during this time of crisis, to the best of our ability.”

Instead of reductions, the executive office is proposing the county rely on its excess cannabis tax revenue and reserve funds to bridge funding gaps. The county also plans on seeking help from the Federal Emergency Management Agency as well as federal funding the state received through the CARES Act earlier this year.

The city of Santa Maria appears to be in a more dire situation than the county. According to a message City Manager Jason Stilwell wrote about the city’s proposed 2020-22 biennial budget, the city could be facing more than $10 million in revenue losses related to COVID-19 over the next two years. This is in addition to the $3.8 million the city lost this ongoing fiscal year because of the pandemic. Santa Maria City Council is slated to vote on the city’s budget at its June 19 meeting.

According to Stilwell’s message, the city library and Paul Nelson pool will remain closed until September and January 2021, respectively. The budget doesn’t include funding for service improvements or needed infrastructure projects. Plus, the proposal would continue a hiring freeze the city started in late March, which would hold positions vacant within the city as they open up.

But these and other efforts to cut spending won’t be enough for the city to bridge its estimated deficits over the next two years. The proposed budget also calls for the city to exhaust the remaining $7.3 million in its smaller reserve fund and tap into its larger reserve fund that has never been used. The latter holds about $20 million.

“As this budget was being prepared, the world was rocked by the unprecedented combination of a public health emergency and an economic crisis—[COVID-19],” Stilwell’s message to the City Council states. “This crisis pushes the City’s finances to a tipping point.” ∆