The unprecedented coronavirus crisis is increasing the needs for county services just as the economic factors severely reduce incoming revenues. Officials believe the road to recovery will be a long one.
County coffers are running low as the novel coronavirus crisis stretches the need for government services just as the revenue from taxes and fees slows to a trickle.
The crisis has also put a strain on technology infrastructure holding together county governments as more workers have decamped to home offices.
“This health crisis has surely become an economic crisis as well. And the economic downturn will surely challenge local budgets, provisional services, and the day-to-day lives of our residents,” said Toni Preckwinkle, county board president, Cook County, Ill.
Preckwinkle joined other county administrators Wednesday for a conference call with reporters to discuss the deep financial concerns brought on by the ongoing pandemic, which has shuttered businesses across the nation and thrust millions of people into the ranks of the unemployed.
In no uncertain terms, county officials made clear in stark language just how dire the current crisis is, warning that a recovery from the situation could be lengthy.
“And let me be clear, it’s going to take months, not weeks, to recover. It won’t be business as usual for a long, long time — for our residents or for us in government,” said Preckwinkle, in her comments during the call, organized by the National Association of Counties (NACo).
“The budgets and the financial viability of our counties are being hit hard, at the local level,” said Teryn Zmuda, deputy chief innovation officer and chief economist at the National Association of Counties.
Many counties rely on taxes, administrative charges, fees or utility revenue for 70 percent of their revenue, said Zmuda. Roughly two-thirds of counties rely on property taxes for more than a quarter of their total revenue. About 10 percent of counties rely on sales taxes for more than a quarter of their revenue.
“So, both property and sales taxes are very important in the bottom line of budgets for counties,” said Zmuda.
“Property taxes are in danger of a sharp decrease right now due to the COVID-19 pandemic, though not necessarily due to a drop in home prices, but we may see a decrease in property tax revenue at the local level due to a tremendous loss of income, jobs, economic activity during this outbreak,” she added.
A number of counties are extending property tax payment deadlines, or waiving late fees.
Cook County hopes to have a clearer idea by the end of April how deep the economic impact will be.
By the end of the second quarter, if the economy has not begun to reopen “we’re going to be looking at how to take more drastic actions, internally with regards to our staff,” said Preckwinkle.
The crisis, which has brought on an added need for services, particularly social safety net services in areas like substance abuse, mental health, homelessness and those struggling with housing affordability, is also putting a strain on counties’ technology infrastructure as workers have moved away from centralized networks to patched-in work-from-home operations.
“So for us, we’ve really seen the need and importance of ratcheting up our infrastructure,” said Mary Ann Borgeson, NACo president and a commissioner with Douglas County, Neb.
For their part, county officials say they are hopeful that federal economic rescue and recovery efforts will not leave them sidelined. However, how much support, or when it will come, is still less clear, even as needs continue to mount.
"There’s no point speculating what the economic damage is going to be. It’s just going to be tremendous,” said Preckwinkle.