Early projections have Johnson County government losing $18-$38 million in tax revenue due to pandemic

While partial payments are allowed residents can expect to see interest accrue daily on any unpaid balance starting May 12. The county does not have the authority to delay payments or waive interest and fees, Director of Financial Management Tom Franzen said, as those actions fall under state statute. 

The county could lose anywhere from $18 million to $38 million in tax revenues due to the coronavirus pandemic, according to the earliest projections prepared by budget director Scott Neufeld. And that doesn’t even include parks and library budgets.

Johnson County commissioners got a sobering look at the potential impact of the business shutdowns on sales and other taxes collected for the rest of the current budget year. Biggest losses were estimated to come from lagging sales tax, but the county could also expect to lose substantially on investment income because of cuts to interest rates by the Federal Reserve, he said.

Meanwhile, the county manager’s office furloughed 46 motor vehicle registration employees, since those offices are now closed to the public. The furloughs save about $240,000 a month.

Neufeld’s estimates focused on the county taxing district and general fund, excluding the park and library districts. The impact to those districts is lower because their funding comes from different sources, he said.

Sales tax collections, originally estimated at $54 million for the county taxing district, could decline by as much as 30 percent, or $16.2 million, if the impact of the coronavirus is high, he said. Property tax could drop as much as 6.8 percent, or $7.5 million. The loss in investment interest was even more dramatic with a loss of $8.1 million from an originally estimated $9.4 million.

March sale taxes started out robust, Neufeld said. It may take a few more weeks to get a better picture. But in the meantime the county has a hiring freeze for non essential jobs and is looking at what capital improvements can be delayed. “We’re basically turning over every rock to see what can be done,” he said.

Commissioners also got updates Thursday on a variety of coronavirus-related matters.

  • It may be mid- to late-April before the Covid-19 caseload reaches its peak in Kansas, said Dr. Ryan Jacobsen, director of the county EMS Services. “We’re not seeing exponential growth in positive tests cases in Johnson County, which is reassuring,” he said. But the progress of the disease is difficult to predict because of the lack of reliable data, he said. “I’m cautiously optimistic that we’ll be prepared and that we’re handling this and we got ahead of this early as far as social distancing,” he said.However Dr. Sanmi Areola, director of the county health department, and public health officer Dr. Joseph LeMaster cautioned that things can change quickly. “It’s too early to take a victory lap,” Areola said.LeMaster said he expects to eventually see a great increase in cases. “I would not at all be surprised to get to capacity in hospital critical care use,” he said.
  • The plan to test a random sample of 4,000 for Covid-19 has stalled because of a shortage of the swabs and other collection materials, said Areola. The commission has already authorized $400,000 for the additional tests, which would be done on a random sample of residents. The randomness of the testing is meant to give a better view of how the disease is spreading.
  • First responders will get some additional support from the Sheriff’s Department Criminalistics Lab equipment to sanitize N95 face masks for first responders. The lab has three cabinets that can sanitize the masks with ultraviolet light. Those cabinets will be used at Fire Districts 1 and 2 and the Med-Act support service facility. The UV light treatment takes 60 minutes or less and allows responders to use the masks multiple times until the elastic degrades.
  • Areola also told commissioners that he has no objections to people wearing their own masks in public. “If you put something on, even if it’s not an N95 it does provide some level of protection so I have no issues with that,” he said. The Centers for Disease Control recently announced it is considering changes in advice for everyday mask use. The CDC has up until now advised only symptomatic people to wear the masks to protect others. However since it’s been shown that the disease can be spread by asymptomatic people, scientists are debating whether to give their blessing to healthy people to wear them.