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Financial Fallout

WINTON – The impact of COVID-19 isn’t limited to medical implications. It is prompting economists to take a hard look at the financial impacts, even at the government level.

“COVID-19 impacts are not just socially, but economically,” said David Cotton, Hertford County’s interim manager, as he addressed the board of commissioners at their regularly scheduled meeting here April 20. “Evaluating that, what does that do to our budget year 2021 as well as the current year budget?”

Cotton said, historically, counties will cut off internal spending at some point just prior to the end of the current fiscal year, which traditionally ends June 30.

“Here in Hertford County, that cut-off point is usually around the end of May,” Cotton said. “Based on the fact that we don’t know the true impact of how COVID-19 is affecting spending, which impacts the sales tax we receive [from the state], I feel the time is now to start locking down our spending for the remainder of the current fiscal year. The hit to our sales tax could be as much as 25 percent.”

Cotton said that type of impact to such an important revenue stream could cause a ripple effect.

“It could possibly take two-to-five years to catch back up to where we would have been had COVID-19 not hit us,” Cotton remarked.

He added that upon speaking with county staff, locking down a budget earlier than mid-to-late May has previously occurred on occasion.

“In leaner [budget] years, it’s been locked down as early as mid-to-late April,” Cotton noted,” which is what I’m suggesting happen now so I will not have to come to you and recommend draconian cuts in May or June to balance out the budget and not hit our fund balance that hard. I’d rather work with our department heads now to start scaling back, cutting off any non-emergency expenditures.”

With the exception of public safety, Cotton recommended the implementation of a plan that calls for scaling back the county’s current year budget effective April 21.

“I think that’s a great idea, and include a hiring freeze,” said Commission Chairman Ronald Gatling.

“I think we still need to hire a finance director,” chimed in Commissioner Andre Lassiter, referencing a position that has been open for months. “If we approve a hiring freeze, I don’t want to see us lock ourselves out from filling that position.”

Cotton suggested to implement the hiring freeze with a special notation of “public safety and critical key positions identified by the county manager in consultation with the board chairman” could be filled.

Commission Vice-Chairman John Horton said the hiring of a finance director is “critical” and should be done “immediately.”

Commissioner Bill Mitchell motioned for the approval of a hiring freeze, effective April 21, with the exception of critical positions at the discretion of the interim county manager in consultation with the board chairman.

Lassiter offered a second and the motion was approved without objection.

 

About Cal Bryant

Cal Bryant, a 40-year veteran of the newspaper industry, serves as the Editor at Roanoke-Chowan Publications, publishers of the Roanoke-Chowan News-Herald, Gates County Index, and Front Porch Living magazine.

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