COVID-drained tax revenues could force cities to considers furloughs, layoffs

City budgets feel the pandemic pinch

GULFPORT, Miss. (WLOX) - Cities could be looking at furloughs and layoffs to cope with COVID-19-induced revenue loss, one mayor has said.

Gulfport tax revenues are down $1.4 million dollars in the last two months. In Biloxi, they are down $2 million, and that doesn’t include lost gaming tax revenues. Cities across the state and country are all in the same boat.

“We’re looking at everything from furloughs to layoffs to reorganization,” said Gulfport Mayor Billy Hewes.

“It is pretty much universal no matter what the size of the city is, everybody is seeing similar problems or concerns,” Hewes said Tuesday. “There’s a lot of decisions that have to be made that nobody is looking forward to.”

“The real concern is right now, there is still a lot of stimulus money out there in the community being spent. There’s a lot of unemployment money being spent and what concerns me is when all of that stops and runs down, what’s the world gonna look like? We’ll have a better sense on what business can come back online and which ones will permanently close,” he said.

Hewes said by the end of July, they should have a good idea of what is going to happen with the economy.

“The fact of the matter is we know our revenues are going to be off. They’re already trending in that direction— for the city of Gulfport and probably other cities too.”

Hewes said it is too early to provide any specifics, but they don’t have much to fall back on.

“We’re on pretty thin margins already, and so we don’t have the luxury of a deep rainy-day fund, and I don’t think most do. So we’re doing all we can to curtail expenditures now in this present budget cycle to try to avoid or put off any sort of furlough considerations.

“We’re looking at the entire structure of the city. What departmental functions make sense, what can go forward, what can be consolidated. No hard decisions can be made, but in these times you have to have everything on the table to make sure you’re making the best decisions with the limited resources that are available.”

As the head of the Mississippi Municipal League, Hewes has reached out to the state's federal delegation to ask for more help from the federal government in the way they can spend CARES Act money.

“Counties and cities can’t use CARES Act monies for loss of revenue, loss of income to the cities,” he said. “And that impacts people’s jobs directly and it affects city services directly. And so that’s the message we are sending (to Congress). Not only with the current definition of the original act, but if there’s a fourth act to come that they make some corrective language with the monies where we can help save some of these jobs and continue to provide the services that our citizens have come to expect.”

Cities are trying to get through the current fiscal year, but also looking toward the future.

“We’re also coming up on for most of us a new fiscal year, and that is going to weigh heavily on how the city functions.”

Gulfport Mayor Billy Hewes on how cities are reacting to recession news

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