The pandemic slowdown dropped Scott County tax, fee and other revenue 13 percent lower than originally budgeted, and county budget director David Farmer anticipates more shortfalls by fiscal year end June 30.
Farmer briefed the board April 30 in anticipation of a formal budget amendment this month to adjust revenue and spending to the new COVID-19 reality.
The changes leave the county’s general fund reserve at $8.37 million, or 14 percent of annual operating revenues.
“That’s well below where we’ve normally been at, which is 20 percent,” Farmer said.
Supervisors’ stated goal is at least 15 percent.
Supervisors already drew down reserves to fully fund this year’s budgeted expenses, which exceeded revenue.
Farmer attributed the latest revenue shortfall to:
• Slower property tax collections. “We’re at 90 percent collection on taxes levied on property,” he said.
Gov. Kim Reynolds delayed March collections two months. The governor also suspended sales of delinquent taxes, another source of revenue for the county.
“That is about $400,000 we will not collect based on that change of the state due to interest and penalties,” Farmer said.
He is hopeful most of that tax revenue will come in eventually.
“It’s too early to know if the state will recommend changes to the fall calendar. But we have seen them delay spring collections one month, and a second month. We have to be cognizant of that moving out there,” he said.
• Gaming revenue. Tax revenue from casinos may drop 20 percent from the $685,000 originally budgeted. That tax money comes fairly equally from the Isle of Capri and Rhythm City casinos, which have been closed since March. That’s revenue the county likely will not make up, he said.
• Sales taxes: Farmer estimates a 14-percent drop in sales tax revenue. Supervisors budgeted $4.6 million in sales tax, then boosted it to $4.8 million in a budget amendment earlier this year. Now Farmer anticipates $4.1 million by fiscal year end. Most of that goes to the county general fund, to relieve pressure on property taxes.
•Road use taxes: This tax on motor fuels will total $4.07 million, higher than originally budgeted, but slightly lower than the county’s amended budget.
“We’re not seeing the sharp drop in fuel taxes yet, although the state is indicating a 25- to 50-percent reduction in mileage,” Farmer said.
That’s also revenue that won’t necessarily be made up when more travel resumes.
• County interest income: Farmer anticipates a $122,000 drop in general fund interest income. The county most recently expected $800,000 in interest income. The revised figure reflects rapidly dropping interest rates on the shorter-term investments used for this fund.
“It was 1.79 percent, and now is down to a 0.7 percent weighted average. That’s a 50-percent drop to two-thirds drop in rate of return the last two months,” Farmer said.
The revised budget also anticipates drops in camping and golf fees.
Some county expenses have dropped. Recognizance, bond and other jail alternatives have dramatically reduced inmate count and cut costs for housing some inmates in other counties.
Inmate count plunged beginning in March. In April, the jail held an average of 173, compared to 303 in April 2019.
Juvenile detention numbers have been down all year, averaging 22 per month compared to 33 last year. April youth detention averaged 15, half of last year’s average for the month.
Supervisor Ken Croken asked the board to add open discussions and work sessions to address the changes. He said the board’s consolidated public meeting schedule does not allow sufficient public discussion.
Since March, the board combined 8 a.m. Tuesday committee of the whole discussions with its 5 p.m. Thursday meetings open to the public through teleconferencing.
“If we were to convene in a more conversational method, we might be able to discuss the expenditures that are expected to be proposed each month, where we would expect revenues to be, evaluate these expenditures on their impact on the economic vitality of Scott County,” Croken said.
Supervisors Knobbe, Beck and Maxwell said they are comfortable with Farmer’s public updates in public sessions, and their private agenda review sessions with county administrator Mahesh Sharma on Fridays before meeting weeks.
“I don’t see the difference other than the time we would do it. Now would be the appropriate time, and the public is open to it,” Beck said.
Kinzer also saw no need for additional meetings, even though he foregoes the private meetings with the administrator. He said the public session discussions sufficient.