FOLEY - During the April 20 council, Foley officials predicted that the 2019/20 fiscal year would end underbudget due to the lasting effects the coronavirus will have on the economy. While February …
FOLEY - During the April 20 council, Foley officials predicted that the 2019/20 fiscal year would end underbudget due to the lasting effects the coronavirus will have on the economy. While February came in with a high tax report, it will be the last month not affected by the current pandemic.
“If you look at our year to date numbers through February then, absent the current pandemic, I would be telling you that we were set up very well to hit our numbers for this fiscal year,” said City Administrator Mike Thompson. “Having said that, February is probably the last month that you’re going to see us hitting our budget, and obviously the reason I say that is because of the shutdown.”
Thompson says that even after the economy has been reopened, he still believes Foley will continue to see muted numbers, and believes that between the months of April and September it will be unlikely that the budget is met.
“It will surprise me if we have a single month that we even hit those budgeted numbers,” he said. “We will be getting the March numbers in soon, but that was only a partial month prior to the shutdown.”
The Stay at Home order was issued by Governor Kay Ivey during April, followed by the closing of many non-essential businesses in an effort to prevent the spread of COVID-19. This has caused a reduction in jobs and income for many people who have found themselves temporarily out of a job during the crisis.
Beginning May, a new Safer at Home order was issued, allowing previously closed businesses to reopen, but only at 50% their normal occupancy. Other businesses, such as entertainment venues, remain closed until a later date.
“Since taxes such as sales tax, lodging tax, and gas tax are collected a month out from their actual payment by customers, the city has not yet seen the actual effects of the partial closure of our economy to our municipal budget,” said Mayor John Koniar. “We will begin to see the magnitude of that effect towards the end of April, when we see the actual collections for the month of March, which was partially affected by closures. We believe that in addition to many citizens being out of work and many businesses closed, the near shuttering of tourism related spending will cause these revenue streams to see material reductions.”
Koniar says that even in the best-case scenario, it is unlikely that the city will meet its original budgeted revenue dollars for the remaining months of the fiscal year. Even now that the Stay at Home order has lifted, he states it will only determine the severity of these shortfalls for the remaining fiscal year.
“As a result, we have directed staff to reduce operational expenditures and capital purchases where possible,” said Koniar. “We are analyzing all of our forecasted capital projects and delaying any we can until we see a better picture of our future revenue streams.”