County looks at financial projections through rosier lens at budget workshop

At this time last year, the Sarasota County Commission was walking a financial tightrope in trying to handle projected long-term budget crunches. This year, however, Commissioners and county staffers brought better news to an early-season budget workshop on March 29.

Dire financial predictions based on new tax breaks put before voters in the fall 2018 elections had officials searching for ways to prepare for sharply lower revenues. After the county moved $5.4 million from the economic uncertainty fund to balance the 2018 budget, commissioners immediately went to work to try to replenish those dollars. Over a period of months, they slashed funds to certain countywide services — resulting in reduced SCAT lines and shortened lifeguard hours during the summer — and later they launched forward with a plan to sell surplus lands.

They even considered the possibility of raising a 5% tax on public utilities.

When first looking ahead to fiscal year 2019, the county was bracing itself for predicted budget shortfalls lasting at least through 2023 as the result of two statewide referendums on the November 2018 ballot: an additional homestead exemption as well as a non-homestead cap extension.

The first of the two looming referendums, however, failed. Thus, with only the non-homestead cap permanently in place, the county was no longer preparing for shortfalls it first saw coming in 2017.

“Our reserve policy is our reserve policy, and we are in the top with regard to meeting those [policies],” Commission Chair Charles Hines said of his current belief in the commission’s ability to maintain funds. “People think we’re broke, but we’re not … Just, two years ago, we were very nervous.”

For example, according to the March 23, 2018 budget workshop presentation, the county had predicted fluctuating budget shortfalls ranging from $2 million to $10 million per year over a period of about five fiscal years as a result of the referendums.

But as of March 29, 2019, the county predicted that, at least through 2024, there would likely be no budget shortfalls at all.

In fact, not only does the current 2019 budget show higher revenue and lower expenses than the original projections from last year, but the long-term picture is starting to look rosier, too.

“We’re seeing the first inkling of the ‘additional available’ balance for fiscal year ending fund balances by fiscal year 2024,” one of the county’s financial officers said.

In other words, at the end of 2024, the county’s general fund may see a small surplus of money that commissioners say hasn't been seen since before the 2008 recession.

But with the words “no recession is factored within the next five years,” typed into the workshop presentation, some commissioners thought it almost seemed to good to be true.

Commissioner Nancy Detert, for example, was concerned that to try to assemble predictions without considering potential future pitfalls was an unwise decision.

“I still don't think we’re back to pre-recession values,” Hines said. “We supplemented our budget with our reserves. We’re still building it back.”

But, he said, it was all starting to look up again.