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County Chair Deborah Kafoury plugs one hole in fiscal 2021 budget, but another revenue shortfall is expected.

MULTNOMAH COUNTY PHOTO: MOTOYA NAKAMURA - Multnomah County's chief executive, Deborah Kafory, discussed the COVID-19 pandemic during a press conference in March. Multnomah County's leader has ordered an immediate 2% cut to every department while preparing to sail a nearly $2 billion budget through the stormy seas of the novel coronavirus.

County Chair Deborah Kafoury warned that the global outbreak already has punched a $58 million hole in the general fund of the proposed $1.98 billion spending plan for the 2020-21 fiscal year that begins Sept. 1.

"We put together a budget with the sands shifting under our feet. I really tried to have as little impact on the community as possible, knowing that what's ahead is unknown," Kafoury said during a news conference Thursday, May 7. "Further cuts will be coming."

Indeed, another budget gap was expected to erupt as soon as Tuesday, May 12, when a new revenue forecast is released.

SCREENSHOT - Multnomah County has filled a $57.7 million budget gap, but if projected revenue continues to fall another will soon emerge. "We are bracing for an icy shock," says county spokeswoman Julie Sullivan-Springhetti.

The known shortfall was bridged by tapping $15.8 million in reserves; ordering the 2% across-the-board cut, saving $7.7 million; increasing the business income tax rate from 1.5% to 2%, adding $30 million; and by freezing managerial and non-union pay, saving $3.4 million.

A March forecast showed the general fund's largest source of cash, property taxes, ticking up to $324 million, though budget director Christian Elkin cautions that "delinquency is expected to increase" in the coming fiscal year.

Kafoury said the two next largest income streams — the business income tax and motor vehicle rental tax — have "plummeted" since disruption from COVID-19 began, and are now predicted to fall 3.3% and 17.6% respectively. Last fiscal year, those sources generated $100 million and $31 million.

There also will be downstream effects if Oregon state revenue falls short by a predicted $2 billion to $3 billion, as federal and state funds usually make up a quarter to a third of the county budget. Another unknown is labor costs, as some two-thirds of county workers will have open contracts by July.

The feds did send Multnomah County $28 million via the CARES Act, with $20 million to be banked for next fiscal year, but the county estimates needing at least $75 million for the response to COVID-19.

So far, no furloughs or layoffs have been announced for Oregon's most populous county, whose operations include low-income health clinics, libraries, SUN school programs, the district attorney's office, the animal shelter, one-half of the Joint Office of Homeless Services, and the sheriff's deputies who patrol East County, run the jails and monitor parole and probation.

Kafoury says the county jails will maintain its current capacity of 1,192 beds.

"The county is the public health authority leading our region through this pandemic. We're also the state's largest safety net responding to an unprecedented demand for services," Kafoury said. "The budget implications of being both are unprecedented."

The Multnomah County Commission is scheduled to adopt the budget on June 11.




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