City of Savannah tax loss due to COVID-19 leaves $13.2M deficit

ByKristen Rary|July 23, 2020 at 11:05 PM EDT - Updated July 23 at 11:14 PM

SAVANNAH, Ga. (WTOC) - At Thursday evening’s city council meeting, members got an update on how much the city has lost due to COVID-19.

An expected loss in tax revenue means the city is in a major deficit compared to where they were in this time last year. But they are coming up with plans on how they can recover.

“Our 2020 updated projection will net a deficit of $13.2 million,” said Melissa Carter, Management and Budget Director.

The city of Savannah is currently expecting that shortfall due to a loss in revenue from property taxes, sales taxes, and hotel/motel taxes.

“All of which is a net result of the national economic downturn primarily related to COVID-19.”

The city laid out a five tier plan for getting the the budget back on track, including pulling funds from savings gathered from property sales.

“We need to abandon the municipal complex original plan and we need to utilize some of those funds that were stocked away in order to re-balance the budget this year.”

Tier one could cover the cost of the deficit as it stands today by cutting 1 to 3 percent of city operations, using SPLOST funds, and borrowing even more from property sales. The deficit would have to be more than double, up to 28 million before the city reaches their fourth strategy, employee furloughs.

The city manager said the tiers make the deficit recovery plan easier to understand.

“Looking at the reduction plan through the tiers provides a much better option than looking at tier 5. Because I don’t think this council would ever consider what the equivalent of a 2 billion tax increase to rebalance the budget,” said city manager Pat Monahan.

The plan will be updated monthly to allow the city to stay up to date.

“We also want to continue to inform, update, and have a plan for the increasingly worst case scenarios.”

The council wants to assure city employees that their jobs are safe. They should not worry about being furloughed, especially since they have avoided layoffs or furloughs so far.

Photo: WTOC

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