San Mateo County officials projecting a bleak financial forecast

Acknowledging the extent of the financial toll is impossible to calculate at this early stage, county Budget Director Roberto Manchia said $45 million has already been spent on response initiatives, and another $40 million in tax income could be lost.

“Those were certainly very sobering numbers,” said county Supervisor Carole Groom, during the discussion Tuesday, April 14.

No decision was made during the meeting, but the session granted supervisors an opportunity to examine the magnitude of the economic hurdle ahead. To that end, County Manager Mike Callagy said the extent of the budget damage will likely be determined by the term of the stay-at-home order which brought the state to a halt.

And while there is pressure to lift the order in the interest of restarting the economy, Callagy said officials must also be mindful of moving too swiftly, allowing another virus surge and compounding the economic damage.

“It could be devastating to the economy and our budget,” said Callagy.

So far, he said the county’s budget is prepared to weather the early stages of the economic storm due to the fiscal conservatism favored by officials, which led to amassing a deep collection of reserve funds.

Looking ahead though, the financial forecast is much murkier, said Manchia, who noted the pain will be felt in both the existing fiscal year as well as the early parts of the next.

Because of the lag in the county’s sales tax collection schedule, Manchia said it is too soon to count the money lost due to the shelter-in-place order issued last month. But he said officials have tracked the county’s Measure K tax income as an assessment model, and the losses are significant.

Manchia anticipated as much as $30 million in losses could accumulate through the end of the existing fiscal year and that figure could rise to $40 million through the first quarter of the coming fiscal year.

Some relief could be available though, as the state and federal government may offset revenue lost by local agencies, said Manchia. A clearer picture of the state’s approach will be available in the governor’s budget revision in May.

To prepare locally, Callagy said a hiring freeze has been implemented in certain departments and spending reductions could be approved eventually, while no furloughs or layoffs are immediately necessary.

An outsize portion of the economic harm is felt in the county’s health office, said Callagy, who noted key programs generating revenue for the already struggling department needed to be canceled for virus response.

Additionally, a majority of the county’s $45 million investment since coronavirus started spreading went into personal protection equipment for the local medical community.

County officials dedicated $20 million to purchasing thousands of masks, gloves, face shields, goggles, gowns and additional equipment for county health works and members of the private medical industry. Officials are optimistic a portion of that amount will be recouped from the state and federal government as well as local care providers. Another $18.5 million went into providing shelter and equipment for those exposed to the virus and the rest went to improved technology.

Yet despite the significant outlay, County Health Chief Louise Rogers said a protective equipment shortfall still exists. She said currently medical professionals need gowns, when previously the item more sorely desired was masks.

There is also still remains a dearth of available COVID-19 tests, which has limited the public’s access. And while she is optimistic more tests will be available with additional ingredients needed to make the tests, she expressed dismay over the lingering shortfall.

“It’s very frustrating,” she said.

austin@smdailyjournal.com

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