Benton County is facing a $2.7 million shortfall in its next budget and may have to lay off employees.

A number of factors, from stagnant construction in the county to lower interest rates, have cut into the county’s revenue, officials said.

It’s not the first time in recent memory the county has had to tighten its belt, and commissioners said other counties throughout the state are doing the same.

Commissioners say it’s too soon to know what the exact effect will be on services, but they are looking for efficiencies. “We might have to be letting some people go,” said Commissioner Shon Small.

Commission Chairman Jim Beaver said they are reviewing what is most important to the county.

“We’ve been doing a lot of things to try to make this $2.7 million not be so big. ... It’s going to have to be a question of priorities,” he said. “This deficit problem, it won’t go away. So we’ll pass another two-year biennial budget in December, and in 2013-14 we’ll be looking at the problem again.”

Beaver said commissioners asked the county’s information technology and human resources departments to look at a recession plan.

“The things that we’re doing, we have to look at the ways that we’re doing them,” he explained. “Maybe we don’t need six people working in an area. Maybe we do things differently. The bottom line is the majority of the county’s budget and city’s budget and state’s budget, is all personnel so it’s all people.”

“If we don’t look at a way to not have a person do it, we keep having the same problem,” he added.

Beaver pointed to the Washington Department of Licensing and said the agency has reduced its staff because it “changed the way that they do business” by allowing some license renewals and other processes to be done online and contracted to private companies.

“All of the counties are feeling the budget pinch. We just need to sit down and talk about what we’re going to do,” he said. “And we reprioritize and we get focused. That’s what we do.”

It’s a process most people are familiar with as they regularly review their checkbook at home and figure out their future finances, Beaver said.

“We do the same thing there, and again we just keep trying to do what we can do with the resources we have,” he said. The shortfall is a result of compounding influences:

-- The county no longer receives liquor excise taxes from the state, a result of state budget cuts. Those taxes provided hundreds of thousands of dollars to the county and its cities.

-- The county’s financial investments used to be generating returns of up to 6 percent. More recently, interest rates on those investments have dropped to a low of less than 0.5 percent.

-- Construction activity in the county has slowed, stunting the growth of its property tax revenue.

“All of that has had a ripple effect,” Small said.

The county, which has a biennial budget of about $115 million, is facing other financial woes. The state Department of Corrections is sending fewer people to the Benton County jail because of state budget restrictions, leaving it up to the county to come up with more money to operate the jail.

Commissioners cut about 2 percent, or about $1.8 million, from the county’s budget two years ago, when they approved a $109 million biennial budget. That budget led to layoffs in Benton District Court, despite a last-minute plea from judges and court employees.

Then-Commissioner Max Benitz Jr., whom Small defeated just weeks before the budget decision, was the only commissioner to vote “no” on that budget. He said the budget didn’t do enough to prepare for difficult economic times.

“Any hiccup in our revenue will cause us to be $5.8 million out of round in two years,” Benitz said at the time.

Small said there isn’t an exact timeline for a decision on the budget, but he is planning to meet with elected county officials during the next two weeks to discuss possible cuts.

“I have not been sleeping much, I’ve been working with the whole team and with elected officials to see what we can do about this deficit,” he told the Herald.

A public hearing on the budget is tentatively scheduled for Dec. 18.

-- Ty Beaver: 582-1402; tbeaver@tricityherald.com; Kristin M. Kraemer: 582-1531; kkraemer@tricityherald.com