'Revenues down, expenses up'

LINCOLN COUNTY – The Lincoln County Commissioners are working with department heads to create a balanced budget for 2021, but surmounting a projected $1.2 million shortfall will require some deliberate actions. The situation at present is one of “revenues down, expenses up” according to Lincoln County Commissioner Rob Coffman.

“We are roughly $1.2 million from balancing the 2021 budget due to some drops in revenue,” Coffman said. “Our overall revenue is expected to be down $400,000 while our expenses are going to increase $300,000.”

Coffman said the increase in expenses is tied to personnel costs, including mandatory cost of living Increases for some county employees.

Revenue drops

Some of the county’s top revenue sources are expected to have a downturn in 2021, including interest revenue and prisoner housing. Normally, the county anticipates making around $325,000 for the funds that are invested in various bonds and accounts. Due to low interest rates that are below one percent in 2020, the county has only pulled in $227,000. For 2021, those investment dollars are expected to be only $55,000.

“Earlier this year, we had a few of the bonds we were invested in that got called in early and the low interest rates are also having an effect,” said Commissioner Rob Coffman.

Another area that was affected by COVID-19 was the amount the county receives for housing out of county prisoners. On average, Lincoln County draws in over $200,000 a year by housing inmates for the Washington State Department of Corrections. Due to changes regarding which prisoners should be jailed before trial, as well as the release of over 1,100 inmates due to coronavirus infection concerns, the state did not house as many inmates in Lincoln County. For 2020, Lincoln County is projected to only receive $95,000 for housing state inmates and anticipates $150,000 in revenue in 2021.

Property tax and sales tax

While interest and inmate housing revenues are projected to be down, property tax and sales tax should remain solid, according to Coffman.

Property tax should generate $2.2 million to the county, an uptick from 2020 due to new construction. The county will also be taking the one percent increase in the property levy as allowed by state law, bringing an additional $21,000 to the county.

Sales tax is expected to stay at the $800,000 rate collected in 2020. Lincoln County has an 8 percent sales tax due to a voter approved increase in the rate that bumped the rate from 7.7 percent several years ago to 8 percent in order to help fund public safety.

Savings likely used to balance budget

In order to bridge the $1.2 million gap between revenue and expense in 2021, the county is likely going to use a portion of the $2 million they have in current expense savings. A $500,000 shift from the road department to current expense will also be needed, a transfer that essentially pays current expense for time that sheriff’s deputies spend responding to incidents on the roadway. The deputy response to road related calls is classifieds as a “road function”, allowing for the transfer from the dedicated road fund.

Borrowing from savings is a move that Lincoln County often has to make, as balancing the 2020 budget required a $900,000 transfer from savings.

Coffman noted ensuring the savings account is kept up is important for situations like what the county is experiencing.

“When our revenue drops and we expect the next year to be challenging, that’s when having savings is really important,” Coffman noted.

A final county budget hearing will be held on Dec. 7 at 8am in the Lincoln County Commissioners’ Office at 450 Logan Street. The public is welcome to attend and offer comment.