Planning ahead: City looking at the impact of COVID-19 on sales tax collections
After the first case of COVID-19 was confirmed in Carter County on March 25, residents of the county fell under Gov. Stitt’s Safer at Home executive order. One of the guidelines contained in the order asked all non-essential businesses to close in order to flatten the curve of coronavirus diagnosis.
With many businesses shutting their doors for the final week of the month, the City of Ardmore expected to see a drop in the amount of sales tax collected. However, when the final totals for the month of March arrived earlier this month, it turns out the city collected $34,000 more in sales tax revenue for the month of March than they did for the month of February.
City Manager J.D. Spohn said they were anticipating a decline in sales tax for the month and were pleasantly surprised by the amount collected. The city will not learn the amount of taxes collected during the month of April — when many businesses were closed for the entire month — until early June.
“The next check will tell us where the numbers are headed,” Spohn said. “The money we’re taking in right now is part of our 2019-2020 budget which ends on June 30, and our budget for next year will start on July 1. So our next check will be the last one for the fiscal year.”
Despite the slight increase for March, the city is looking ahead and tightening its belt for both the final months of the current fiscal year and the upcoming budget for the next.
“We looked at this year’s budget, and we sent out an email to all our executive staff to stop all spending unless it’s absolutely necessary. We put a hiring freeze on open positions unless it affects public safety, and we have several positions open that we’re not filling in order to save money. We’re also just finishing up on projects that are already started and we’re not starting on any more.”
Looking ahead to the budget for next year, Spohn said open positions the city previously planned on filling will be cut and every new hire will be critically reviewed to make sure the city can afford to fill the positions.
The city will also be limiting new projects in the upcoming year.
“We have limited any project we put in the budget,” Spohn said. “We took a good look at what we were planning to do, and we cut a few projects that we had in mind for 2020-2021. We decided to delay a couple of the big projects, and I had each department make a priority list. So we’ll be working the priorities that we feel are very important for us to get completed next year.”
The final budget for the new fiscal year will be voted on and approved by the City Commission in June.
Spohn said the budget cutbacks are being done out of caution, and the city has reserve funds available to relieve any budgetary shortfalls or emergencies. These funds are typically used after particularly damaging bouts of severe weather, but can be easily accessed when needed.
“The last time we had to access it was to deal with an ice storm a few years ago,” Spohn said. “We had to contract with a company to deal with some tree limbs and get the streets cleared. The city has to pay for that up front, and in the end we can get reimbursed by FEMA if it’s declared a disaster area. So we’ve always got emergency money for the unexpected.”
Spohn said while the exact dollar amount of emergency funds available varies, the city keeps at least $5 million that can be easily accessed whenever needed.