The Clark County Council on Tuesday approved a $723 million budget for 2022, up from the $705.4 million budgeted in 2021. The county also expects to bring in around $644 million in revenue next year.
County Manager Kathleen Otto said the $723 million in expenses is “significantly more than 2021 due to the one-time funding that the county has received due to COVID-19.” That one-time funding, which primarily came from the American Rescue Plan Act, helped offset rising expenses in 2021. Otto said $22.1 million in American Rescue Plan Act funds were included in the 2022 budget, compared with $35.7 million in American Rescue Plan Act funds in the 2021 fall supplemental budget.
Despite the increase in expenses, the county council voted down a recommendation from Otto to raise property taxes by 1 percent, as allowed by state law, during its meeting Tuesday. Instead, the council will bank that 1 percent increase. The tax increase would have added around $3.85 per year to the tax bill for a $449,000 home.
“Over time, our general fund has a deficit because we are not able to keep all of our sales tax. Much of it goes to the state, and we don’t get as much,” said Council Chair Eileen Quiring O’Brien. “We also have a deficit because our community goes across the river and spends some of their funds over there.”
Quiring O’Brien said she couldn’t “in good conscience” raise taxes to make up that deficit, especially when many people are still without jobs.
Councilor Gary Medvigy said the loss of sales tax revenue to Oregon needs to be addressed first before raising property taxes. Medvigy also said the property tax increase wouldn’t ultimately do much to fix the fund deficit.
“We’re unfairly hobbled by our tax system. I’m hoping that our local legislative delegation will rally to that hue and cry. This is unfair to Clark County,” Medvigy said.
With most fund balances still in the black, Medvigy said the trick will be to invest that money to get the best long-term return.
Councilors Julie Olson and Temple Lentz favored the property tax increase.
“We continue to hear year after year about the situation with our general fund, expenses outpacing revenues,” Olson said, adding the $3.85 per year is “a bargain for the quality of work and services that we provide.”
Lentz noted that not taking the 1 percent increase now would have a “compounding and cascading effect” on the budget.
“While there are other things that we should be trying to do to remedy our structural deficit, this is one piece of that equation,” Lentz said. “By not doing this, we are making the problem worse.”
Among the more notable items included in the budget was a drop of over $20 million in general fund revenues between the 2021 and 2022 budgets.
“The general fund has hundreds of revenue streams, many were impacted by the pandemic,” Otto said. “The 2021 adopted revenue budget was very conservative as we were still reviewing revenue impacts of COVID-19.”
General fund revenues, which include property and sales taxes, account for 28 to 30 percent of total revenues for the county, while general fund expenses make up 26 to 30 percent of total expenses. It is the single largest source of revenue and expenses for the county.
But when it comes to the annual budget, the county has more than 100 funds, or categories, of revenue and expenses to review.
One example is the health department fund, which saw revenues decrease from around $21.7 million in the 2021 budget to $16.7 million in 2022. American Rescue Plan Act funding was again a primary driver, Otto said.
The Youth and Family Resource fund, which had less than $100 in revenue budgeted in 2020, skyrocketed to $42.7 million in 2021 and $39.6 million in 2022. Otto said this was due to the county’s Department of Community Services receiving additional revenue for community support due to the pandemic.
The county road fund, which is budgeted for approximately $84.1 million in 2022, has seen its ending balance rise and fall in recent years.
Eva Haney, finance manager for Public Works, told the council during its meeting that’s not unusual.
“The projects ebb and flow. But specifically, the exact phase of the projects we’re taking on at that exact point in time has a pretty substantial impact,” Haney said.
Haney said the department typically spends less money during early phases, like engineering and right-of-way development. That changes as projects come under construction.
“That’s what really takes huge chunks out of the fund balance,” Haney said.