Georgetown is expected to fall some $2 million short of its projected 2019-20 revenue budget due to fallout from the pandemic shutdown. In addition, city’s reserves are anticipated to drop some $3.1 million.
Stacy Clark, the city’s finance director, outlined the city’s last quarter revenue projections during a special meeting via Zoom of the city council Monday evening.
“This is a worst case scenario,” she said, projecting revenue shortfalls of as much as 30 percent. Clark cited several sources including the Kentucky League of Cities which estimated the pandemic shutdown would cost municipalities as much as 30 percent of its fourth quarter revenue. The city’s fiscal year ends June 30.
Georgetown’s net profits taxes were down some $233,000 through March from 2019 and were now projected to finish the year down as much as $551,867. The city had budgeted $1.8 million in net profits tax revenues, but now expected to end the fiscal year at $1.2 million, she said.
“The bulk of the drop occurred in April,” she said about the net profits tax. The federal tax deadline has been pushed to July because of the coronavirus, which is a factor in the drop of these revenues with a some bounce back possible when taxes are due, she said.
The shortfall was eased by several revenue categories that were actually up over the previous year through three quarters. Through March, the city’s payroll tax revenues were actually up $295,195 over the previous year, but revenues are now projected to end the year some $585,000 short of the $12.5 million budget forecast, Clark said. Extensive layoffs, furloughs and hours reduced due to the pandemic affected the payroll tax receipts.
Other revenue categories that show an increase over 2019 include insurance premium taxes, up $185,168 year-to-date and expected to finish the year up $140,113. The bulk of property taxes were paid before the pandemic and are at $1.9 million, up from $1.7 million in 2019. Alcohol taxes are also up $35,935, Clark said.
The city started the fiscal year last July with $12.3 in reserves, but with the shortfalls, and the necessity to use some reserves for expenses during the pandemic, Clark said she expects the city to end the fiscal year on June 30 with some $9.2 million remaining in reserves — down $3.1 million.
Mayor Tom Prather said the city has watched expenses closely, but has tried to avoid layoffs or any reductions to personnel, although there are several departments entering the pandemic short-handed.
The city finance committee is working on the 2020-21 budget and the mayor said he wants to make the budget presentation at a special meeting May 28.
“This is going to be one harsh budget,” Prather warned. He said he wanted to present the budget and then let the council examine it.
“I don’t even expect this to be a first reading,” he said about the May 28 presentation.
The council must approve a 2020-21 budget before midnight June 30, 2020.
Mike Scogin can be reached at firstname.lastname@example.org.