When Pandemic Hit, County Braced for Recession-era Finances; the Opposite Occurred

Posted July 6, 2021 at 5:30 am by

Negative Lodging Tax Funds in 2020, to the Best Year in Land Bank History in 2021

By F. Milene Hen­ley, San Juan Coun­ty Auditor

Milene Henley. Contributed.

I have always been amazed by four-way stops. Dri­vers learn as teens to nego­ti­ate these tricky, coop­er­a­tive inter­sec­tions, and most of us nev­er for­get. It’s a mar­vel of social engineering.

This past year has been one giant exper­i­ment in social engi­neer­ing. We all had to learn to behave in ways that were not nat­ur­al but were nec­es­sary to get us all through this painful intersection.

Because of the coop­er­a­tion and care shown by res­i­dents of San Juan Coun­ty, San Juan Coun­ty had the low­est rate of COVID cas­es in the state and so far (knock on wood), no deaths.

Finan­cial­ly, San Juan Coun­ty, like all of Wash­ing­ton state, was dealt a blow last March when busi­ness­es were closed and peo­ple told to stay home. Sales tax plummeted.

The Coun­ty Health Officer’s order to close accom­mo­da­tions dealt a fur­ther blow. In June, the coun­ty had its first month ever in which lodg­ing tax – a com­po­nent of sales tax – was neg­a­tive, because of refunds.

Based on the last reces­sion, the coun­ty pre­pared for the worst: reduced sales tax, slowed build­ing activ­i­ty, decreased real estate sales, reduc­tions in oth­er econ­o­my-dri­ven revenues.

That’s not what happened.

As soon as accom­mo­da­tions re-opened in mid-June, the econ­o­my began to pick up.

Cooped-up fam­i­lies found that they could trav­el to the San Juans, enjoy the out­doors, and still keep their dis­tance from oth­ers. Sec­ond-home own­ers moved to their island homes, to work and school remote­ly, in the rel­a­tive qui­et and safe­ty of the islands.

Their pres­ence showed in unex­pect­ed ways – sol­id waste rev­enue, for exam­ple, dou­bled com­pared to the pre­vi­ous year. This change is in sharp con­trast to what hap­pened dur­ing the last reces­sion when sol­id waste rev­enue decreased.

The new inter­est in remote liv­ing showed itself in oth­er ways, as well. Rather than dip­ping, real estate sales soared, giv­ing the Land Bank its best year ever. Build­ing per­mit rev­enue exceed­ed not just bud­get, but also all pre­vi­ous years.

In addi­tion, the Coro­n­avirus Aid, Relief, and Eco­nom­ic Secu­ri­ty, or CARES, Act poured hun­dreds of thou­sands of dol­lars into the coun­ty to man­age the response to the pan­dem­ic. Between grant rev­enue and high­er-than-bud­get­ed build­ing rev­enue, the County’s gen­er­al fund rev­enue for 2020 end­ed high­er than bud­get, despite a decline in sales tax revenue.

In 2021, the upward trend con­tin­ues. Total first-quar­ter gen­er­al fund rev­enues far exceed­ed all pre­vi­ous years. First-quar­ter sales tax rev­enue exceed­ed past years and all expec­ta­tions. Build­ing con­tin­ues strong, and real estate sales are lim­it­ed only by inven­to­ry. Although we do not yet have final data for the sec­ond quar­ter, these upward trends are clear­ing con­tin­u­ing. Only inter­est lags expectation.

One of the big ques­tions fac­ing the coun­ty now is how to spend the $3.4 mil­lion (spread over three years) that the coun­ty will receive from the Amer­i­can Res­cue Plan Act. Some addi­tion­al pro­tec­tive mea­sures, such as those imple­ment­ed with CARES funds, are already budgeted.

Atten­tion to the county’s phys­i­cal plant is need­ed. A plan to con­sol­i­date cus­tomer ser­vice activ­i­ties in order to improve pub­lic access to ser­vices is being dis­cussed. More pos­si­bil­i­ties are being considered.

Although San Juan Coun­ty and many of its eco­nom­ic sec­tors are thriv­ing, the COVID-induced reces­sion did not hit all sec­tors equal­ly. Many busi­ness­es, par­tic­u­lar­ly restau­rants and enter­tain­ment venues, are still suf­fer­ing from the loss­es of last year. Oth­ers are strug­gling to find staff to re-open. Until in-per­son school resumes in the fall, many per­sons for­mer­ly in the work­place – par­tic­u­lar­ly women – are find­ing it nec­es­sary to stay home with chil­dren rather than return to work.

As the recov­ery con­tin­ues, our coop­er­a­tion is still need­ed. Busi­ness­es still need our sup­port. Some places still require masks. It was our coop­er­a­tion that got us safe­ly through the past year. If we can suc­cess­ful­ly nav­i­gate this, maybe we can learn to nav­i­gate round­abouts as well as we do four-way stops.

You can support the San Juan Update by doing business with our loyal advertisers, and by making a one-time contribution or a recurring donation.


  1. I feel one of the biggest con­trib­u­tors to the health of sales tax rev­enue was that peo­ple ordered and had deliv­ered many items they would oth­er­wise buy off-island. Since we are a des­ti­na­tion sales tax state, that tax mon­ey came here instead of stay­ing in Burling­ton or Anacortes.

    Comment by Adam Eltinge on July 6, 2021 at 9:05 am
  2. Thanks Milene! What about the SJC Home Fund? Can more resources from the Amer­i­can Res­cue Plan be allo­cat­ed towards this crit­i­cal issue in the islands?

    Comment by Darcie Nielsen on July 6, 2021 at 9:32 am
  3. Well done Milene !! Look­ing for­ward to our recov­ery this year.

    Steve Hushe­beck

    Comment by Steve Hushebeck on July 7, 2021 at 5:06 pm

Leave a Reply

Your email address will not be published. Required fields are marked *

By submitting a comment you grant the San Juan Update a perpetual license to reproduce your words and name/web site in attribution. Inappropriate, irrelevant and contentious comments may not be published at an admin's discretion. Your email is used for verification purposes only, it will never be shared.

Receive new post updates: Entries (RSS)
Receive followup comments updates: RSS 2.0