‘I’m Just Concerned’: California Economy Faces Uncertainty Due To COVID-19, Wildfires

Sep. 17--The Fresno County Board of Supervisors this week approved a $3.9 billion budget amid uncertainty over the long-term effects of the COVID-19 pandemic.

The new budget reflects a 7% increase from the previous budget. It is aided partly by federal relief handed to local governments for the coronavirus pandemic, known as CARES Act relief.

County officials say they're maintaining a watchful eye on the pandemic's economic recovery progress to determine how the budget will be affected in the coming year.

Fresno County Chief Administrative Officer Jean Rousseau said the budget represents a "bare-bone" document with conservative revenue estimates, mostly due to the economic uncertainty.

"We're hunkering down, preparing and waiting to see how the economy responds after enduring COVID, and we'll know more within the next year or two," Rousseau said at the supervisor's Monday meeting when the budget passed.

The county's General Fund Reserve, which sits at $54 million, was not increased this year due to the shortage of extra cash. Any excess funds were used to fund departments, and it's typically used to pay off debt and increase the reserves.

Last year $18 million was added to the General Fund.

Rousseau's conservative approach to the budget, which he said is meant to provide a cushion on spending, projects that public safety tax revenue under Prop 172 may fall short in the coming year. While it remains to be seen, he projects a $15 million drop in Prop 172 sales tax revenue.

The county expects to see a drop similar to the Great Recession. The Fresno County Sheriff's Office gets most of the funding from the Prop 172 taxes.

Fresno County's economy uncertain due to COVID-19

It appeared to be no secret that revenue estimates were in question as the county begins its new fiscal year. However, Rousseau said that the county does have cash available should it need it to balance the budget. And he said that federal economic relief to handle the coronavirus pandemic did seem to help stabilize the economy.

But the pandemic-triggered recession is also expected to hurt the real estate market and commercial property, according to Fresno County Assessor Paul Dictos, who is in charge of property tax assessments and recorded documents.

He said property assessments are based on market values as of Jan. 1 of each year, and next year's rough start may reveal the economic effects of COVID-19 in that sector. He said that while it looks like consumers are maintaining a healthy housing market this year, the commercial market is down almost 50%.

Dictos spoke at Monday's supervisor meeting in response to a question from Supervisor Sal Quintero, who asked what Dictos' outlook was for the new fiscal year. Dictos, while answering with a joke, did not sugar coat it.

He said someone had sent him an email recently saying that 20 years ago, the country had Johnny Cash, Bob Hope, and Steve Jobs, "today we have no cash, no hope, and no jobs," the sender told Dictos. Dictos passed on that same sentiment to the board.

"I'm just concerned," he said.

One glimmer of hope to return to normalcy is the recent improvement in the county's coronavirus infection trends, which may be putting the county closer to allowing some businesses to reopen. If the county continues to improve, it would mean retail businesses could increase the number of people permitted indoors at a given time.

Wildfires latest disaster confronting Fresno

As the county tries to figure out how it might weather the COVID-19 pandemic, it is also focusing on the recent wildfire disaster. The impact of the Creek Fire is just beginning to be known.

Already, about 1,500 residents displaced by the wildfire are being housed in 20 hotels, while hundreds of animals are being looked after at different county locations. Rousseau said the county might create a disaster budget to help address the costs.

And until they are rebuilt, the homes burnt in the Creek Fire won't count toward the county's assessed value revenue.

Fresno County Sheriff Margaret Mims told President Donald Trump about the disaster during a roundtable earlier this week while requesting federal help.

She said the fire had affected the woodland, families, and an electric power system was destroyed. She said future concerns include erosion and mudslides that could hurt the region once again.

There was some good news amid the economic uncertainty in the new budget, too.

The county did not make any layoffs or salary reductions for the new year. It is also providing $2.7 million in one-time funds to cover wage increases for In-Home Support Services workers. The county had been in negotiations with the worker's union.

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