The first wave of the Fiscal Impact Survey concluded in December 2020. A total of 94 budget officers from across the Bay Area, Central Valley, and Sierra Foothills regions responded to the survey. This survey aimed to gather information about how local governments navigated the first six months of the pandemic and their outlook for the future. We summarized and expanded on those results in a Cal Matters guest commentary. The link below is a more detailed overview of the results.
Highlights:
- COVID-19 is having a major impact on local government budgets: 20% of respondents indicate they will not be able to balance their budget this fiscal year; an additional 20% indicated only a “maybe”.
- 80% of respondents indicate revenue declines from COVID-19, with the biggest losses coming from service fees, and sales, occupancy, and fuel / motor vehicle taxes.
- Local governments have employed several strategies to deal with budget issues stemming from COVID-19. Nearly 40% of respondents have dipped into “rainy day” funds and 28% plan to do so in the future. Many agencies indicated decreasing services and deferring maintenance and capital expenditures; one in every eight have resorted to layoffs and furloughs.
The second wave of the Fiscal Impact Survey concluded in May 2021. The survey expanded to the entire state of California and collected responses from 217 budget officers. In addition to increasing the coverage of the survey to the state, the second wave tracked changes in critical aspects of local fiscal health 6 months after the first wave and one year into the pandemic.
Highlights:
- The number of local governments that expected to balance their budget by the end of the fiscal year increased substantially since the first wave, but about 10% did not think they would balance their budget.
- A larger share of respondents reported a significant increase in the demand of health related services when compared to the 2008 financial crisis.
- Local governments continued to rely on multiple strategies to adjust to revenue loss and increased demand. While fewer entities furloughed staff, one in five laid off staff, two in five restructured service delivery and/or reduced services.