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Santa Maria Sun / News

The following article was posted on April 15th, 2020, in the Santa Maria Sun - Volume 21, Issue 7 [ Submit a Story ]
The following articles were printed from Santa Maria Sun [] - Volume 21, Issue 7

County moves forward with preliminary budget amid COVID-19 unknowns

By Zac Ezzone

Because government budgets are based on projections and estimations, there’s always a degree of uncertainty involved with preparing them. But this is even more so the case during a global pandemic.

Santa Barbara County officials held a budget workshop on April 13 for the county’s 2020-21 fiscal year. During the meeting, Assistant County Executive Officer Jeff Frapwell presented the Board of Supervisors with a preliminary budget that was put together before the onset of the COVID-19 crisis. This preliminary budget includes a projected $1.2 billion in operating revenue, which will decrease as a result of the pandemic.

Frapwell—who estimated during a previous meeting that the county would lose about $3 million in revenue due to the virus by the time the current fiscal year ends on June 30—said it’s too soon to calculate how much the county will lose in revenue and take on in additional expenses during the upcoming fiscal year. 

He said the biggest losses will take place in the amount the county collects in sales tax and transient occupancy tax (TOT) revenue, while the county will likely spend more money helping people in need as a result of the pandemic. Because the situation is fluid and still developing, he recommended the county move forward with the budget as is and then make changes and other cuts as needed down the road.

County staff will release a recommended budget in May, which the Board of Supervisors will vote on in June. This budget could look different from the preliminary budget Frapwell presented to the board, as county staff continues to learn more about the financial implications of COVID-19. After approving that budget, the Board of Supervisors could make additional changes to spending during a mid-year budget review or at other future meetings.

Fifth District Supervisor Steve Lavagnino, and his fellow supervisors, backed this approach. 

“It doesn’t really make a whole lot of sense to spend a lot of time reflecting on numbers at this point,” Lavagnino said. “I think our strategy is a sound one in that we defer as many decisions as possible.”

Although the county may not know the extent of the hit it’ll take from COVID-19, Frapwell presented ideas on how to fill some of the gaps that will emerge. These strategies include reallocating cannabis tax revenue, tapping in to the county’s reserve funds, seeking state and federal aid, and working with departments to develop contingency plans in the event that budget cuts are required down the line.

According to Frapwell’s presentation, the county could receive an estimated $10.6 million in cannabis tax revenue during the 2020-21 fiscal year. Prior to any COVID-19 related losses, the county was estimating that it’d receive $11.3 million sales tax revenue and $14.3 million in TOT tax revenue. 

Lavagnino, who has been criticized by some cannabis opponents for his perceived staunch support of the industry, commented on how this stream of revenue is quickly becoming one of the most important for the county. 

“[Cannabis tax revenue] will probably pass sales tax, and it’s approaching levels of the TOT,” Lavagnino said. “I think it’s an important part of a three-legged stool that we have now with sales tax, TOT tax, and now the cannabis revenue.” 

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