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Henrico revising budgets to reflect uncertainties from coronavirus

Henrico County officials have begun to brace for significant financial impacts caused by the COVID-19 coronavirus pandemic.

Anticipating sharp drops in revenues from sales, meals and occupancy taxes, officials are preparing adjustments to the current year’s budget and are revising the proposed budget for fiscal 2020-21.

Officials have imposed an immediate hiring freeze and instructed all agencies to suspend all discretionary spending. The county also has put on hold all unfunded capital projects.

The Department of Finance plans to update revenue and expenditure projections on a monthly basis and request fund appropriations quarterly in fiscal 2020-21 until the financial picture becomes clearer.

“Recent announcements from Gov. Ralph Northam’s team regarding billion-dollar state budget shortfalls in the current year and next fiscal year reinforce the need to realign our plans and expectations,” said Meghan Coates, deputy director of Finance. “These important, cost-saving measures are going to be the backbone of our plan to endure the financial impact of this event.”

 The Board of Supervisors had begun its review of the county’s $1.4 billion proposed budget last week, when the coronavirus outbreak triggered a global economic shutdown, with business closures, mass layoffs and stock market selloffs.

“The world has changed,” County Manager John A. Vithoulkas told the board at its March 24 meeting. “The budget that we worked on, that was presented to you, is no longer sustainable based on the revenue assumptions that were put forward – in one week.”

Finance officials are now looking at a revised proposed budget that would be significantly less than the current year’s plan. The proposed budget would likely not support additional positions or new initiatives and would allow limited cost increases, for example, for health care premiums and contributions to the Virginia Retirement System.

 A revised proposed budget is expected to be presented to the Board of Supervisors in mid-April based on updated forecasts for state aid to localities and public feedback. The board will hold a public hearing on the plan at 6 p.m. Tuesday, April 14 in the Board Room at the Henrico Government Center, 4301 E. Parham Road. Information will be forthcoming on how members of the public can participate and provide their input.

A vote to adopt the budget is scheduled for Tuesday, April 28. Once approved, the budget will guide operating and capital spending for the year beginning July 1.

The board on March 24 approved several emergency ordinances to help residents and businesses navigate the economic downturn by having the county extend the payment deadlines, without penalty, for various taxes.

Board Chairman Tommy Branin, of the Three Chopt District, noted that the relief efforts would be managed within the current year’s budget.

“This county didn’t leap forward with these measures and reductions without analyzing the budget and recognizing that the county will be fine.”

 
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