Thurston County budget revenues are projected to decrease in 2021 although not as much as previously anticipated.
The budget office released a preliminary budget report Nov. 23. Rather than prepare a biennial budget as usual, the county commissioners converted to an annual budget for 2021. The change came in response to the uncertainty created by the novel coronavirus pandemic, said assistant county manager Robin Campbell.
The biggest change in the budget is substantially less operating revenue from the state and federal governments, according to the report, represented by a decrease from about $71.8 million in 2020 to over $41.5 million in 2021. The county received coronavirus relief funds this year through the Washington state Department of Commerce, Campbell said, however that funding is expected to expire by Nov. 30.
"We have not received any assurance from either the state or Congress that we'll receive additional funds," Campbell said. "We can't build a budget based on something that might never materialize."
It's possible more intergovernmental revenue may materialize next year but there are has been little action from Congress on following up CARES Act funding so far. Despite the lack of foreseeable support, Campbell said the county will prioritize funding its coronavirus response.
"The main impact is going to be to the general fund," Campbell said. "Things like testing and contact tracing, case investigations, isolation and quarantine — all of those things are things we absolutely must pay for."
In all, the report shows the county expects total operating and capital revenues to decrease by about $40.7 million from $409 million in 2021 to $368 million in 2021. Expenditures are also expected to decrease by about $49 million from $420 million in 2020 to $371 million in 2021.
Revenue for the general fund, which has the greatest flexibility of all the funds, is expected to decrease by $13.4 million from $117.2 million to $103.7 million. Expenditures for the general fund also are expected to decrease by $8.7 million from $119.4 million to $110.7 million.
Public hearings on the preliminary budget are planned for the afternoon and evenings of Dec. 7 and 8. After the hearings, the board of commissioners will make their final decisions by Dec. 11 and adopt the final budget on Dec. 18.
Sales tax revenues rebound
Campbell said county officials were concerned early on that economic impact of the COVID-19 restrictions would hurt tax revenues, but the new report shows tax revenues for the operating budget increasing from about $138.2 million in 2020 to over $142.9 million in 2021.
"What we have found is that retail sales in Thurston County are very strong, stronger by far than other areas in the state," Campbell said. "And so, we are actually at this point in time tracking very close to sales tax forecasts that we had pre-pandemic, which, again, is quite surprising."
Campbell said sales tax revenues decreased in July by nearly 15% but have since rebounded. The budget office is studying the trend to better understand why sales tax revenue recovered, she said, but they suspect it may be due to online shopping.
"We think that there is a benefit that we're experiencing by people now shopping online and having goods delivered to their home where the sales tax is attached to the location where the goods are delivered," Campbell said.
Tax revenues may also have been helped by measures that supported people during the pandemic, Campbell said, including stimulus payments and enhanced unemployment benefits.
"That is not to say that our families were not impacted by the coronavirus and that nobody lost money in the pandemic," Campbell said. "We know people were hard hit but perhaps not as hard as they would otherwise have been had it not been for these types of support."
The budget also may include a 1% increase in the property tax levy if the board of commissioners adopt a resolution of substantial need. That resolution will be decided Tuesday, Nov. 24.
New investments: Superior Court and courthouse repair and upgrade
Campbell said the county needs more judges and hopes the 2021 state legislature will approve a new position once the county allocates funding for it.
However, she said the aging courthouse still presents challenges.
"That's a double-edged sword," Campbell said. "We need another superior court judge. If we get one, where will we put one? One of the things we need to do is address our space needs in the county."
The county commissioners planned to put a new courthouse on the ballot this year, Campbell said, but they rescinded the measure when the pandemic struck.
"We still have to address it," Campbell said. "Our court needs more space; it needs more courtrooms. Our buildings aren't safe; they are starting to fall apart. Other offices and departments also have seen need for additional space."
A placeholder in the budget for repairs and upgrades gives the county flexibility to reassess its needs and update the cost and scope of the project, Campbell said.
The operating budget also includes funding for two more road deputies and training in the Sheriff's Office. The new positions are intended to serve the county's increasing population, enabling deputies to better respond to residents' calls, according to the budget proposal.
The report shows the Sheriff's Office law enforcement budget has steadily increased from about $18.2 million in 2017 to just over $21.7 million in 2020. If the preliminary budget is approved, the law enforcement budget would increase to about $22.4 million in 2021.
The new budget also allocates funding for four more deputy positions in corrections. From 2017 to 2020, the Sheriff's Office corrections budget has increased from about $20.8 million to $22.8 million. With the new budget, it could reach up to about $23.3 million in 2021.
Additionally, the preliminary budget includes funding for more disease investigators in Public Health and a 1.5% cost of living increase for county employees.
The county expects to have 1,207 full-time equivalent positions next year, according to the report, the most it's had in 10 years.
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