City of Fort Worth bracing for financial losses from COVID-19
Fort Worth officials estimate sales tax revenues can be undercut by as much as $ 26 million. (Courtesy of Pixabay / Pexels)
The financial losses due to the novel coronavirus and the subsequent “Stay Home, Work Safe” contracts from the city of Fort Worth will affect not only the city organizations, but also local businesses, said city manager David Cooke.
“On the financial side, the COVID-19 pandemic will have an impact,” he said.
Fort Worth City officials estimate that sales tax revenue, which represents 22% of general fund revenue, could fall as much as $ 26 million in the second half of fiscal year 2019-20 – April 1 through September 30.
Revenue is down more than 80% in a recent survey by the Fort Worth Chamber of Commerce of more than 1,200 local businesses, said Robert Sturns, director of economic development for the city of Fort Worth.
“The only thing that really affects small businesses is access to capital,” said Sturns. “Many small businesses don’t have the skills to work without income for more than 30 days.”
The city of Fort Worth has an average sales tax revenue of more than $ 170 million per year.
Other city entities like the Crime Control and Prevention District, which rely on portions of sales tax revenue, are projected to lose up to $ 12 million in funding in fiscal year 2019-20.
The city also estimates a loss of at least $ 17 million from other sources of income such as development, fines, and public events.
City workers were able to reduce building permit activity by 18% and plating activity by 36%, according to a city press release. If the trend continues, overall fund losses will be between $ 2.2 million and $ 3.6 million, the press release said.
In addition, the city is forecasting losses in the range of $ 15 million to $ 25 million from the cancellation of public events, the press release said.
The silver lining, Cooke said, is that the city was in a strong financial position before the virus began to spread.
“During this pandemic, we have been and are out there and will provide the services our residents need,” Cooke said.
Together with the use of the federal C.oronavirus help, assistance and economic security Under the Fort Worth law that could provide the city with up to $ 166 million in aid, they have outlined a number of strategies that can be used to mitigate lost revenue, such as:
- Freeze discretionary spending;
- Evaluation or postponement of capital projects;
- Prioritization of programs and services; and or
- City staff hired except for the police and fire brigade.