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Sussex budgets for uncertain times

$158M plan projects building-revenue losses after near-record 2019-20
May 22, 2020

The 2020-2021 Sussex County budget is unlike any other budget county officials have proposed. Due to uncertainty about the economic impact of COVID-19 restrictions, Sussex officials say they have proposed a conservative, baseline budget, with several supplements attached in case economic conditions improve, allowing more expenditures during the fiscal year.

The total budget – including general fund and capital projects – is $158 million, about $28 million less than the current fiscal year budget. The general fund is set at $81 million, about $15 million less than last year, and the capital budget, at nearly $56 million, is down $14 million. The water and sewer projects fund is $41 million, a $1.6 million increase.

On heels of near-record revenue

During a May 19 presentation to Sussex County Council, County Administrator Todd Lawson said the proposed budget reflects the current state of the economy. He said building-related revenue, with a 10 percent increase this year, is expected to decrease next year.

Thanks to a late 2019 and early 2020 boom, building-related revenue stands at near-record levels. Realty transfer taxes – the county's largest single source of revenue – stand at a projected $35.7 million, closing in on an all-time high of $36.3 million set in 2005. Other building-related revenue, projected at $13.2 million, will also be near record levels set in 2006.

However, near-record building-related revenues may not last in fiscal year 2020-21 as the county grapples with the economic uncertainties associated with the COVID-19 emergency. The proposed budget of $158 million is down 15 percent from the current year, with projected revenues down 65 percent to 85 percent of their current levels.

Building-related revenue is budgeted at $10.3 million and realty transfer tax is budgeted at $22.8 million. The county anticipates collecting $14.8 million in property taxes next fiscal year.

Lawson said March was on pace as a boom month for building revenue. “It looked like it would have been the single largest month in history for building permits, but it was quickly stalled in mid-March,” he said.

Building permits have fallen below 2019-20 levels over the past two months, but will total about 10,500 permits this year, which was the same number as last year.

“Normally, we see an increase in permits from winter to spring, but this year we are seeing a decrease,” said finance director Gina Jennings.

No money from savings

Jennings said no money from savings will be included in the budget. This fiscal year, $10 million was included for construction and $5 million for the pension fund. “We do those types of things in good years, so we are not doing it,” she said.

She said expenses are relatively flat, with no new initiatives or grants and no changes in personnel benefits.

Overall, in the general fund, revenues are projected to increase 2 percent, or $1.3 million, thanks to an estimated $1 million from the new county accommodations tax. Jennings said the tax is not currently being collected, and it's possible it will not be collected.

Revenue from interest is projected to decrease by 24 percent with building-related revenue down 5 percent and sheriff’s department revenue down 10 percent.

Jennings said 18 of the county’s 28 departments are budgeted to spend less money than the previous year.

Supplemental options

Jennings said each quarter, income will be reviewed, and for every $1 million in unbudgeted revenue, departmental expenses, purchases or projects could be restored based on established priorities. “These are things that would have been done during a normal year,” she said.

Included in the supplements is $500,000 for creation of a housing trust fund; $500,000 for economic development loans; training and seminars, administration building repairs, equipment purchases, additional stormwater work and creation of a Western Sussex Business Park.

Public hearing is June 23

A public hearing on the fiscal 2020-21 budget is scheduled during the 10 a.m., Tuesday, June 23 meeting.

The budget presentation is on the county website at sussexcountyde.gov/county-budget. The hearing may be limited to a virtual session with public comment submitted via telephone or in advance by emailing budget@sussexcountyde.gov.

 

Budget highlights

$3.4 million for 22 supplemental Delaware State Police troopers

$5.1 million for other public safety grants

$2.2 million for work at Coastal Delaware Airport

$2 million for work at Delaware Coastal Business Park

$1.7 million to preserve open space and farmland

$1 million in engineering costs for a new public safety complex to expand Sussex Emergency Operations Center to accommodate the county emergency medical services administrative offices and training facilities

$750,000 to continue efforts to expand broadband internet in rural areas

$588,000 for eight new employees at the county dispatch center, who are needed to handle the growing workload due to taking Seaford 911 calls after the center closed last year

$139,000 for an assistant county engineer

 

 

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