The Wilkes County commissioners learned Tuesday night that a 10-14% spending cut will likely be needed in the fiscal 2020-21 budget due to the coronavirus and efforts to slow its spread.

Wilkes County Finance Director Chris Huffman shared this during the meeting when he said county government is projected to receive $1.3 million less in sales tax revenue than budgeted for the last three months (April, May and June) of fiscal 2019-20 due to coronavirus.

Huffman said this would bring sales tax revenue down to $14.1 million in the current fiscal year, which is about the same amount received in fiscal 2008-09. “So, we basically have lost our growth over the last seven or eight years.”

He also said a 20% reduction in sales tax revenue is projected for fiscal 2020-21 due to the virus.

Huffman said the sales tax loss projections are based on guidance from the University of North Carolina School of Government, state treasurer’s office and the N.C. Association of County Commissioners. Sales tax revenue accounts for 21% of county government’s revenue.

He said that to help offset this loss, County Manager John Yates froze travel and isn’t allowing any non-essential purchases, but a 10-14% cut in spending will likely still be needed in the new budget.

He said that when county department heads recently presented their budget requests for fiscal 2020-21, they were asked to instead start with their 2019-20 budgets and cut them by 10%. Huffman said smaller county departments can’t do this without reducing salaries, so some departments will likely be cut by more than 10% and some less than 10% to produce the same results.

In addition to county government departments, Yates said Wilkes County School and Wilkes Community College officials were made aware of county government’s financial situation.

When Eddie Settle, chairman of the commissioners, noted that part of the purpose of the discussion Tuesday night was to make the public aware of county government’s financial condition.

Settle asked if a 14% cut would mean losing employees, County Manager John Yates said it might result in some programs being eliminated and that would include job cuts.

He also said county government’s strong fund balance will help it withstand the impact of the coronavirus. Yates said county governments also may be included as beneficiaries in a new federal stimulus package being discussed in Congress.

Commissioner Keith Elmore said the commissioners and county government staff have done a good job maintaining a healthy fund balance in recent years and the coronavirus is a perfect example of why that is important.

Yates said that because of all the uncertainties, he wants to delay adopting a new budget as long as possible. New budgets are supposed to be adopted by July 1, when the new fiscal year starts, but an interim budget can be used for several months into the new fiscal year.

Huffman said that through the end of February, the county was $679,814 ahead of where it needed to end up with the sales tax revenue budgeted for fiscal 2019-20, which was a 10% increase over the prior year. He said the county had record retail sales tax revenue in January.

He said the coronavirus is having a more severe impact on Wilkes County government than on urban county governments with greater annual percentage increases in sales tax revenue. Huffman said Wilkes County government sales tax revenue has only grown about 1-2% annually in recent years.

Local governments receive sales tax revenue from the state two months after it is collected, so the next sales tax revenue received will be for March. “Sales tax revenue for March could be pretty decent” because the economic impact of the coronavirus wasn’t really felt until the last week of March, he said.

Yates said it’s hard to project when the coronavirus will wind down and how quickly the economy might recover, so the projected impact on sales tax revenue could be too high or too low. “It’s the hardest projection I’ve ever done.”

Huffman said the commissioners adopted an $84 million budget for fiscal 2019-20 last year. He said that with grants and budget amendments it now is $85 million. He said 29% of the budget was spent on human services, 28% on public safety and 26% on education for a total of 83%, or $68 million.

Yates said a proposed fiscal 2020-21 budget will be presented at the board’s first meeting next month, which is May 5.

Other matters:

The commissioners also unanimously approved:

• a budget amendment receiving a $15,000 Golden LEAF Foundation grant and $15,000 from the Wilkes Economic Development Corp. for buying a truck to haul farm equipment that the Wilkes Cooperative Extension Service makes available to farmers to rent. County Manager John Yates said Wilkes Cooperative Extension Director John Cothren has been using his own truck;

• waiving late business personal property listing penalties until June 15 for any business that filed for extending their filing period for federal tax returns to July 15. Wilkes Tax Administrator Alex Hamilton said the N.C. Department of Revenue and attorney for the N.C. Institute of Government recommended that county governments consider doing this;

• reappointing all of the current members of the Wilkes County Aging Advisory Committee, which was requested by Jennifer Cooper, director of senior nutrition services for the Blue Ridge Opportunity Commission;

• appointing Wilkesboro Police Officer Christopher Arnder to the Wilkes County Juvenile Crime Prevention Council as representative for Wilkesboro Police Chief Jason Delbert. He replaces Wilkesboro Officer Jason Delbert.

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