In looking toward its fiscal future, Buncombe County has officially broken out the R-word.
“We are likely already in a recession, and it could be a deep one,” said Brownie Newman, chair of the Buncombe County Board of Commissioners, during an April 7 budget work session. According to first-pass estimates presented by county staff members, all sources of revenue but property taxes and miscellaneous taxes and license fees are expected to come in lower for fiscal year 2021 than for the current fiscal year.
Meanwhile, said Budget Director Jennifer Barnette, sales tax revenues are already projected to take a substantial hit through the remainder of fiscal year 2020. Due to the county’s heavy reliance on tourism — an industry especially vulnerable to travel and business restrictions imposed to reduce the spread of COVID-19 — she estimated that April, May and June would all see sales tax receipts 35% less than in 2019.
That slowdown is expected to put the county’s sales tax revenue about $3.5 million below its budgeted receipts through June, Barnette explained. Additionally, she said the county expects payment on just 99% of property taxes for fiscal 2020, down from 99.75% for fiscal 2019, which will likely cause those revenues to come in roughly $1.6 million below the current budget. Buncombe will be able to cover those immediate shortfalls from its general fund balance, a cash reserve of roughly $48 million.
However, the Board of Commissioners already dipped into that reserve for over $13 million to balance the $336.8 million general fund budget at the start of the fiscal year; the county had only anticipated $323.5 million in general fund revenue. Because board policy is to maintain a fund balance of at least 15% of total expenditures — just under the current level — similar spending for fiscal 2021 is unlikely.
“This is a season of austerity in many ways,” said Commissioner Jasmine Beach-Ferrara, who was attending the work session by phone. “A lot of things we thought might be possible even a month or so ago obviously have to be assessed through a different lens.”
Even with the fall of sales tax receipts, Barnette noted, the county anticipates just over $324.8 million in general fund revenue for fiscal year 2021, a growth of about .4% over the fiscal 2020 revenue budget. She said that increase was primarily due to property taxes on close to $450 million in Mission Health assets that would be added to the rolls next year.
But that growth was dwarfed by the spending requests of Buncombe government departments, which totaled nearly $360.9 million — $36 million more than anticipated revenue for next year and a 6.5% increase over this year’s budget. Even after county budget staff pared those requests down to key and recommended increases, the first-pass expense budget for fiscal 2021 exceeded revenue projections by over $22 million.
Among the biggest new spending items, Barnette said, were more than $4.1 million in staff and equipment for public safety, over $1.7 million for human services and in excess of $1.12 million for general government. New employee requests included 12 EMT paramedics, three 911 staffers and eight library assistants.
Not included in the budget were nearly $3.5 million in discretionary projects that had previously been prioritized by commissioners, such as $1 million to support fare-free Asheville bus service, $790,000 for conservation easements and $110,000 to support playgrounds at county elementary and intermediate schools. Also omitted was $750,000 to renovate the Karl Straus track at UNC Asheville.
Despite the dire outlook, Newman urged his colleagues to fight for spending priorities they believed in. He argued that funding solar panels in particular would be worthwhile both for environmental reasons and for reducing the county’s electricity costs going forward.
“Talk to your fellow commissioners. Talk to the staff,” Newman said. “None of these will be easy, but it’s ultimately our call what to do on these.”