'Very, Very Difficult' Year Expected For Cuyahoga County Finances

Cuyahoga County is preparing for a drop in sales tax revenue, a major contributor to the county's bottom line.
Cuyahoga County is preparing for a drop in sales tax revenue, a major contributor to the county's bottom line. [Nick Castele / ideastream]
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Local governments are bracing for a financial blow from the across-the-board business shutdowns state health officials say are necessary to stop the spread of the coronavirus.

It’s too soon to know exactly how much of a hit state and local agencies will take. But with Ohio unemployment claims soaring to 187,780 last week, government leaders are preparing for a serious impact to their budgets.

The plunge in commercial activity across Northeast Ohio will hurt local sales tax revenue, which accounts for 54 percent of Cuyahoga County’s general fund budget.

“The bottom line is we’re looking at a very, very difficult financial year for the county government,” Cuyahoga County Executive Armond Budish said. “And couple that with the fact that the needs are higher than they’ve ever been in this community with what’s going on, it makes it very difficult.”

The county is freezing hiring for most open positions, except for the most critical jobs Budish said. His administration has also asked departments to look into budget cuts as deep as 10 percent — though Budish stressed he is not ordering such cuts right now.

In the near term, the county is spending money to respond to the pandemic. The county has placed orders for personal protective equipment (PPE) and is looking into funding to help small businesses and unemployed workers, Budish said.

“Our primary concern is to help the residents of Cuyahoga County stay safe during this crisis,” council finance committee chairman Dale Miller said. “So we’re spending additional money. We’re providing additional services.”

With interest rates effectively at zero, the county’s investment income will likely fall, too, Miller said. State aid could drop as well, he said.

“There are going to be some ways to save money, so I expect we’re going to be able to offset it to some degree,” Miller said. “But I expect this is going to be a very serious problem.”

Meanwhile, with the primary election period extended until April 28, county leaders have about one more month to make their case to voters for Issue 33, the health and human services levy.

The Greater Cleveland Regional Transit Authority also relies heavily on sales tax revenue. Those tax collections have come in higher than expected so far this year, but RTA Chief Operating Officer Floun’say Caver said at a board meeting this week the good times likely won’t last.

“We recognize that this number will become very much more depressed throughout the year, as we look at social distancing and stay-at-home orders,” Caver said.

State government is also preparing for a decline in revenue. Gov. Mike DeWine this week ordered a hiring freeze for his administration and directed departments to find spending cuts of up to 20 percent.

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