Howard County released an overview of the COVID-19 impact on the operating budget. In the 12-minute video (available at, Holly Sun, Howard County’s Budget Administrator walks through the revenue and expenditure impacts, notes fiscal actions already taken, and the challenges and risks ahead.

“We’re feeling the impact on both sides – revenues and expenditures, and we’re not alone in facing a much more challenging outlook than we could have anticipated at the beginning of this year,” said Sun. “We know this is going to stress our finances, but we are working to minimize severe actions and ensure our core services are supported.”

In the past few weeks Howard County has incurred nearly $4 million in costs related to COVID-19 response, and that number is growing weekly. Howard County is estimating a revenue loss of over $35 million in the current fiscal year, with major losses in income tax, recordation, and hotel tax.

A significant revenue impact is also anticipated for FY 2021. These revenue losses don’t qualify for any known federal aid, which usually only covers expenses related to emergencies. It is also not clear if there will be any state assistance, which normally reduces funds to counties during recessions.

Sun also highlights challenges in neighboring jurisdictions, who are taking similar mitigation steps, including hiring freezes or cutbacks in capital projects. Last week, the State of Maryland reported a 15 percent revenue loss, $2.8 billion, a major contributor being a loss of income tax revenue. The National League of Cities also emphasized that local governments that rely on

income taxes will experience and immediate and strong shock to their fiscal systems, while governments that rely on property taxes will have a more mid to longer-term impact.

The overall economic outlook for the United States has become more apparent in the past week – with unprecedented job loss. The economic impact depends on the duration of the COVID-19 pandemic and the federal policy response. Many economists are looking at a prolonged recovery pattern, with a 2-3-year gradual recovery like the Great Recession. Sun concludes by emphasizing the significant uncertainties on the aggregate impact from this unprecedented pandemic and anticipating a longer period of fiscal stress potentially beyond fiscal year 2021.