Grim budget for S.L. County

A first and gloomy glimpse of Salt Lake County's near-term fiscal future was offered Tuesday as the auditor presented his 2009 tentative budget to the County Council.

Salt Lake County Auditor Jeff Hatch and his analysts painted a grim picture of continued declining revenues and financial challenges, but he did offer an accolade for the county's history of sound money management before outlining the details of the rough year ahead.

"Even though the county is taking a $10.9 million reduction in sales tax revenue over last year, it still has a very strong financial position," Hatch said. "We're continuing with the principals that have maintained our AAA rating on debt ... and we are one of only 21 counties in the country to earn and keep that rating."

Hatch brought on contract economist Doug McDonald to review the figures and forecasts for the upcoming year. Most of the indicators he reviewed bode ill for the county, though there were a few bright spots.

McDonald presented the worst news first. Residential construction, representing a booming $820 million in 2007, was down to about $100 million a quarter so far in 2008 and expected to continue falling in 2009. Nonresidential construction is down 25 percent this year, and likely to move down another 10 percent next year. The bad news continued: residential building permits, down 35 percent through July of this year over the same time last year; sales tax revenues down; inflation up.

The glimmers of positivity McDonald could see in the year ahead was a 10 percent rise in service-related businesses and a countywide wage increase near 3 percent. All factors taken together, McDonald said his forecast model shows, essentially, "zero growth" in the coming year for the county.

Salt Lake County Mayor Peter Corroon said Monday, during a mayoral debate, that zero growth is exactly what he is planning for next year.

Though it sounds like a prescient comment, Hatch submitted his numbers to Corroon's office last week and Corroon has until next Tuesday to submit his budget to the council. This reckoning is required to be balanced — a task that will require Corroon to cover a $36 million difference between budget requests and revenues across the general fund, capital improvements and municipal service funds, according to Hatch's numbers. After he proposes his budget, it is up to the County Council to determine the final iteration of the county's spending plans.

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