Mayor Jenny Wilson presented her proposed 2021 budget to the Salt Lake County Council on Tuesday, and it contained at least one surprise — sales tax revenue is up.
The past year has thrown plenty of curveballs at the county’s finances, including a deadly pandemic, forced business closures, a disastrous earthquake, hurricane-force winds and the weekslong Neff Fire. After reviewing the numbers, however, Wilson found the county is “clearly in much better shape than we feared six months ago.”
Still, Wilson and her staff are bracing for a rough year ahead, especially since a coronavirus vaccine remains months away at best and future federal aid is tied up in congressional limbo. In her budget presentation, the mayor recommended using the county’s relative financial strength to continue tackling COVID-19, retain county employees and shore up community assets that have taken a hit.
“While our revenue projections are solid and our fiscal house is in order, we remain cautious, exceptionally cautious, especially with so much uncertainty,” Wilson said. “Expect a year of adaptation and rapid adjustments.”
The county received more than $203 million in 2020 from the Coronavirus Aid, Relief and Economic Security (CARES) Act to help combat the pandemic. The county still made $78 million in cuts to its base budget, Wilson said, bracing for fallout after businesses closed and tourism came to a standstill over the spring. Many of those cuts will carry over into the 2021 budget in the form of delayed projects.
Not all industries in the county have taken equal hits during the economic downturn. Marriage license and passport revenue is down by $770,000 in the County Clerk’s Office. Operating revenue for parks and recreation dropped from $24.1 million in 2019 to $17.8 million this year. Restaurant taxes could be down by as much as 25% and taxes from hotel stays may take a 50% hit, according to Darrin Casper, deputy mayor of finance and administration.
“The brake lights will still be on for the economy for the next while,” Casper said.
But the budget does include some bright spots. While unemployment in Salt Lake County is high, at 5.9%, it fares better than the national average of 7.9%. County workers held onto their jobs during 2020, some transitioning to temporary pandemic-related roles, and the county is budgeting for a few new hires in libraries, animal services and the Recorder’s Office.
The county also saw a building spree this year, with new housing units exceeding their prerecession peak in 2015, according to the Kem C. Gardner Policy Institute.
“Construction remains extremely strong and that’s really bailing out our sales taxes overall,” Casper said.
Sales tax revenue in 2019 was $67.6 million, and the county projects it will grow to $69 million this year, according to the mayor’s office.
“If you wonder if having a diversified economy pays off, it pays off in times like these," Casper said.
The mayor’s office plans to transfer nearly $1.7 million from the general fund to cover revenue loss at Eccles Theater. The mayor also proposed transferring funds from various accounts to help the Salt Palace Convention Center make up for lost income.
The county may see new cultural and recreation projects this year as well. The mayor has budgeted moving forward with new libraries in the Granite and Daybreak branches, opening the Mid-Valley Performing Arts Center in Taylorsville as well as funding Magna Park, Wheeler Farm and the White City Trail.
The mayor’s finance team projects a $83.3 million unassigned general fund balance for the end of 2020 and a $70 million balance by the end of 2021, which could help the county address other unknown costs brought by the pandemic.
“For comparison purposes, the 2020 original adopted budget had an ending balance of $41 million,” Casper said. “So the work we’ve done over the last year has bolstered the general fund by about $29 million.”
The mayor’s office has earmarked $36 million to help with vaccine administration, testing, contact tracing and other coronavirus expenses in the year ahead, although Casper said that figure could soon change.
“The real trick is understanding the amount of money needed to address the public health emergency moving forward,” Casper said.
Wilson acknowledged that while the county is in a stable financial situation, plenty of its residents continue to struggle. She said that both the county’s budget and pandemic response will continue to be “people first” in 2021.
“The real foundation for Salt Lake County government is Salt Lake County’s people," Wilson said. "We are resilient because you are resilient.”