Wayne County Executive Warren C. Evans announced today, Wayne County revenues will be off by as much as $152 million for the current fiscal year 2019-2020, highlighting the financial strain the global COVID-19 pandemic is placing on local and state governments. The projected COVID-19 related shortfall could amount to more than 20 percent of the county’s projected revenues.
“Our main focus remains fighting the coronavirus spread as a public health matter. However, the county’s long-term health requires proactively planning for budget shortfalls created by this pandemic,” said Executive Evans. “I am committed to working with other elected officials and the commission on fiscally-responsible solutions that allow us to continue providing essential services to our residents. Over the past five years, we have put our financial house back in order, but the on-going global pandemic and ‘Stay Home’ orders are putting a tremendous strain on the county’s ability to fund essential services at current levels.”
With initial projections showing a revenue loss of $152 million over the second half of the county’s current 2019-2020 fiscal year, the Evans Administration is working with other Wayne County officials on an updated two-year budget forecast that assesses every fund and department as well as evaluated potential investment losses in pension and other post-employment benefit plans.
“Every option is on the table and under consideration,” said Assistant County Executive Khalil Rahal, who presented the revised forecast to Wayne County Commissioners. “We must take immediate and difficult steps to balance our budget, and we will. In addition, we are working with members of our Congressional Delegation to ensure relief funds also target local governments who are especially hard hit.”
The framework for Wayne County’s post-coronavirus recovery plan includes:
• Tapping funds from the accumulated budget surplus/Rainy Day Fund and possibly the Delinquent Tax Revolving Fund;
• Deferring capital expenditures and renegotiating existing leases; and,
• Workforce reductions are a possibility though no current reductions have been identified.
Additionally, the county is exploring opportunities to restore funding through federal and state aid. Since taking office in the midst of financial emergency in 2015, Executive Evans has delivered consecutive budget surpluses and improved Wayne County’s credit rating to “investment grade” according to all three Wall Street ratings agencies.
“Wayne County accounts for nearly 18 percent of Michigan’s population but has more than 45 percent of the state’s total COVID-19 cases and deaths; we’ve been especially hard-hit,” Evans said. “Over the last five years, Wayne County has put itself on a strong financial foundation through transparent budgets, right-sizing operations, and doing the hard work to eliminate its deficit. We cannot and will not allow the pandemic to wash away that progress. Addressing the problem now gives us the time to create a budget that best serves our residents and employees in this new fiscal reality. It also ensures we are prepared to address the coronavirus pandemic as it evolves.”