Economic downturn hurting county budgets, NACo survey finds
Many of the nation’s largest counties are facing revenue shortfalls, higher expenses and more difficulty with borrowing money as a result of the ongoing economic downturn, according to a survey from the Washington-based National Association of Counties (NACo). What’s more, most of the respondents said they expect even greater budget shortfalls by the next fiscal year that may lead to more drastic budget cuts, including employee layoffs and furloughs.
Of the 17 counties with populations of more than 500,000 that were interviewed for the survey, all but one reported that the current economic crisis was having a negative effect on their budgets, with 87 percent anticipating revenue shortfalls and 27 percent expecting increased expenses. Also, while only five counties said they planned to implement layoffs or furlough employees in response to this fiscal year’s budget shortfalls, that number doubled for respondents saying they would have to take those steps next fiscal year, and three other counties said they would renegotiate their labor contracts. “The survey results suggest that this is only the beginning of a looming financial crisis for counties,” NACo Executive Director Larry Naake said in a statement. “It’s clear that the challenge for counties to continue to deliver the services residents have come to expect is fast becoming more difficult as a result of the housing/foreclosure crisis, declining taxes and revenues and increased borrowing costs.”
The complete survey is available at
www.naco.org.
