2011 is going to look a lot like 2010. The local economy will continue to make small gains. County services, already reduced, will be further reduced. And more than likely, the large operating deficit from county Solid Waste will continue to grow.

San Juan County has been fortunate, compared to many counties. We were hit hard, as were most counties, in 2009. But unlike most counties, we were already showing signs of recovery in 2010. While it has certainly not returned to the halcyon days of 2008, sales tax revenue in San Juan County grew in 2010 by about 3 percent, at a time when many other counties’ sales tax revenue was still falling.

Real estate excise taxes fared less well. 2010 REET revenue was even lower than 2009, and substantially so. While we are beginning to see some activity in real estate, the prices are so much lower that revenue is little affected.

There will be no dramatic return to the way it used to be. Rather than a “light at the end of the tunnel,” there will be a slow increase in ambient light, and our eyes will gradually adapt to the new level.

The change is not all bad. It has caused government, as well as families and businesses, to re-examine the ways they operate. San Juan County decreased its operating hours in many departments beginning in 2009. The longer hours will likely never return. In 2011, for the first time, the county will have five days on which most county offices will be closed.

In truth, the county has not reduced services as much as it should have. The 2010 and 2011 budgets were balanced only by the graces of county employees. The Sheriff’s Guild forewent cost-of-living adjustments in 2010, and the local AFSCME union has done the same for 2011. Without those concessions, plus the five closure days, San Juan County’s 2011 budget would not be balanced.

Even with some growth in the economy, the county’s expenditures will continue to grow faster than revenue. Substantive and lasting reductions in operating costs will be required in order for the county to achieve a sustainable budget. Such reductions will require changes in the way we do business, including, more than likely, further reductions in services. No such reductions are included in the 2011 budget.

Solid Waste is a good example. The adopted Solid Waste budget for 2011 calls for business as usual, which means continued deficit spending. Until the county is willing to change the way Solid Waste does business, the losses will not go away.

Nonetheless, I am cautiously optimistic about the future. San Juan County is blessed with a tourism economy which has held fairly strong. A gradual return to confidence in the national economy, as well as a growing acceptance of the new reality, will slowly draw the county out of its current slump.

Because of structural mismatches between revenues and expenditures, county services, as with services at all levels of government, will further erode. But effective management could minimize reductions and prevent debilitating reductions. The key will be effective management.