The coronavirus pandemic is projected to put a nearly $1 million hit on money DeSoto County gets from parks, the Turner Center and other sources. But the county otherwise is heading into a new budget year mostly unscathed and with an intact reserve fund.
Credit a close eye on spending and a 1.2% growth in countywide taxable property values, said County Administrator Mandy Hines, as county commissioners prepare to adopt a $39.9 million general fund budget for fiscal 2020-21. That figure is up by $766,807 from the current year.
But the overall budget — which includes accounts for public safety, buildings, transportation and garbage collection, among other things — is in line for cuts totaling $7.4 million, a 7.51% decline from the current budget.
With the cuts, the total budget is proposed for $91 million.
The budget, Hines said, is built on a flat general operating millage rate that is the same as the current year, which is 8.506. The Law Enforcement taxing unit is also the same as the current year at 2.439 mills. The combined millage of 10.945 is applied to each $1,000 of taxable property value.
The general operating millage rate represents a 1.3% increase over the rollback rate of 8.4905 mills, a figure that would give the county the same amount of revenue as the current budget year.
The new proposed general fund millage will generate an additional $379,175, the budget shows.
Hines said the major challenge has been offsetting losses in sales and motor fuels taxes. Monthly fluctuations have made it difficult to gauge the amounts of offsets needed, according to Hines.
“Beyond that, we needed to be in a position to be able to expend local resources to address community needs resulting from the potential of mass spread of the virus,” the county administrator said in an email.
To cover COVID-19 costs, DeSoto projects it will get around $5 million from the Coronavirus Aid Relief and Economic Security Act, or CARES. The figure is a $1.6 million drop from the current fiscal year.
That federal help, Hines said, helped the county to maintain a healthy rainy-day fund.
County officials projected sales taxes would be exceptionally lower for at least one quarter of the year, Hines said. “Sales taxes were down, but fuel taxes were the largest negative impact.”
Collections are improving but state reimbursements of the collections are always three months behind. Thus, the tentative and final budget are built based on projections, Hines said.
Those projections are for inter-governmental fund transfers, which includes state revenue sharing and reimbursement of DeSoto’s 1.5% portion of the county’s 7.5% sales tax.
“We expected a big hit in the sales tax,” said Hines, but that didn’t happen. The decline in the inter-governmental transfers, which includes the sales tax reimbursement, is projected at 6% — going from $5.4 million to $5.1 million, the budget shows.
The motor fuels tax hardly fared better, according to Hines. The proposed budget projected the county’s share of fuel taxes will reach $2,495,123, compared to a current year reimbursement of $2,556,331.
“They are down one month and up the next.” Hines said. “It is very challenging.”
Fuel taxes are starting to recover, but they stayed a lot lower a lot longer than the sales tax did, Hines noted
On the loss side, county officials estimate that all revenue reductions will total between $900,000-$950,000 for the current fiscal year. “This number includes revenue losses in Parks and the Turner Center operations,” Hines said.
But a reserve fund balance of $5,287,584 will remain.
That reserve puts DeSoto in a “strong position” for handling contingencies, said Brian Wagner, county budget coordinator.
“We can pay up to three months of bills without one dime coming through the door,” Wagner said at the Sept. 9 budget hearing.
County commissioners will hold a final budget hearing at 6:30 p.m. Sept. 23 in commission chambers.