Commissioner says county finances good, but worries a 'storm is coming'

LANCASTER — Fairfield County commissioner Steve Davis said the county is in great financial shape. But he has expressed concern during recent commission meetings about how a national recession could affect county finances, saying a storm is coming.

"I said that before we all learned that the GDP (Gross Domestic Product) contracted in the first quarter by 1.4%," Davis said. "And if you think about the definition of recession it's nearly two quarters of contraction in a row. So, yeah, I'm concerned about a recession. That is part of my cautiousness in estimating our future revenue streams."

He said a recession would negatively impact those revenue streams. Davis is already concerned about how the COVID-19 may have altered tax revenue.

"In 2021 our sales tax receipts increased by 16.9% ($26.4 million total)," Davis said. "That's a strange phenomenon that we've never seen before, that kind of growth in the sales tax revenue. It just seems to me that that is not repeatable. So, of course, we're not budgeting a 16.9% increase for 2022. But even more than that, I'm worried that that 16.9% might have been something that we don't fully understand."

MORE: Fairfield County commissioners pass 2022 general fund budget of $56.3 million

Davis said he didn't know if the increase could have come from increased federal government spending or other factors, including people spending more because of extra government benefits from the pandemic. Therefore, he said he's discounting 2021 completely regarding future financial modeling.

"I don't trust it," Davis said. "But in any event, the county is not going to be in bad financial shape because we have prepared ourselves for literally every scenario. I'm just concerned as we discuss the projections in our out years that we're being very cautious in making those projections."

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He said his caution stems from future projections and not the county's current financial status.

"We are rock-solid strong," Davis said. "We have prepared for every scenario. But I think prudent modeling would show some decrease in sales tax revenue in the near term. Probably to account for that anomaly in 2021. We can't have projections and then we don't meet them. We need to have projections that are conservative enough that we always exceed them, which is what we've done 11 years in a row now."

jbarron@gannett.com

740-681-4340

Twitter: @JeffDBarron

This article originally appeared on Lancaster Eagle-Gazette: Commissioner says county finances good, but wary of national recession