Worst is yet to come for county budgets, survey says
The nation’s counties, small and large, are still struggling to cope with declining revenues as a result of the recession, according to a new survey by the Washington-based National Association of Counties (NACo). And, while the current budget crisis is the worst in nearly two decades, many survey respondents said they expect next year to be harder still.
Nearly half of the responding counties, 47 percent, said that their anticipated budget shortfalls this fiscal year were worse than expected, and four out of five respondents (82 percent) said the shortfalls would continue into their next fiscal year. “The survey findings suggest that counties large and small are experiencing their worst budget and revenue crisis since the early 1990s,” said NACo Executive Director Larry Naake. “The great challenge for counties of all sizes in the months and years ahead is continuing to provide essential services to residents who are relying more on county services and programs.”
Counties are already cutting some services, along with imposing travel restrictions, delaying purchases, increasing taxes, and furloughing or laying off employees to compensate for dwindling revenue, according to the survey. The survey, which included participants in 138 counties in 34 states, found that the leading sources of revenue shortfalls are property taxes (52 percent), state or federal aid (50 percent) and sales taxes (46 percent).
The NACo survey also found that about two-thirds of the responding counties (61 percent) expect to receive funding from the $787 billion American Recovery and Reinvestment Act (ARRA), but most counties have received less than half of the expected funds so far. The majority of anticipated funds will come from the new Energy Efficiency and Conservation Block Grant program, the Community Development Block Grant Program, and various transportation programs. “The Recovery Act funds are slowly making their way to counties and will no doubt help fill some budget deficits and keep some programs afloat,” Naake said. “Our grave concern is what happens to state and county budgets when the federal economic stimulus dollars end next year?”
Read the complete survey results.