Wayne County Projects $152M Deficit Due To Coronavirus

DETROIT, MI — Wayne County is projecting a minimum deficit of $152 million for the 2019-2020 fiscal year due to effects felt from the new coronavirus.

County officials on Tuesday announced the shortfall could amount to more than 20 percent of the county's projected revenues.

"Our main focus remains fighting the coronavirus spread as a public health matter," said Wayne County Executive Warren Evans. "However, the county's long-term health requires proactively planning for budget shortfalls created by this pandemic. I am committed to working with other elected officials and the commission on fiscally-responsible solutions that allow us to continue providing essential services to our residents.

"Over the past five years, we have put our financial house back in order, but the on-going global pandemic and 'Stay Home' orders are putting a tremendous strain on the county's ability to fund essential services at current levels."

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With initial projections showing a revenue loss of $152 million over the second half of the county's current 2019-2020 fiscal year, county officials are working on an updated two-year budget forecast that assesses every fund and department as well as evaluated potential investment losses in pension and other post-employment benefit plans.

"Every option is on the table and under consideration," said Assistant County Executive Khalil Rahal, who presented the revised forecast to Wayne County Commissioners. "We must take immediate and difficult steps to balance our budget, and we will. In addition, we are working with members of our Congressional Delegation to ensure relief funds also target local governments who are especially hard hit.

Officials said the framework for Wayne County's post-coronavirus recovery plan includes tapping funds from the accumulated budget surplus/Rainy Day Fund and possibly the Delinquent Tax Revolving Fund. It could also mean deferring capital expenditures and renegotiating existing leases. Officials said workforce reductions are a possibility, though no current reductions have been made.

Additionally, the county is exploring opportunities to restore funding through federal and state aid.

"Wayne County accounts for nearly 18 percent of Michigan's population but has more than 45 percent of the state's total COVID-19 cases and deaths; we've been especially hard-hit," Evans said. "Over the last five years, Wayne County has put itself on a strong financial foundation through transparent budgets, right-sizing operations, and doing the hard work to eliminate its deficit. We cannot and will not allow the pandemic to wash away that progress.

"Addressing the problem now gives us the time to create a budget that best serves our residents and employees in this new fiscal reality. It also ensures we are prepared to address the coronavirus pandemic as it evolves."

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