Roanoke considers ways to reduce spending to make up for $4 million shortfall

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Clarification: As part of the plan to curtail spending, city officials are considering reducing, not cutting, the amount the school system receives by $1.47 million. City officials say the school system will still receive 40% of local revenues.

ROANOKE (WSLS 10) - The city of Roanoke is dealing with a projected $4 million shortfall. Officials already implemented a hiring freeze to help save money, but it's not expected to be enough to fill the gap. City council is examining other options to cut spending which includes funding to local schools.

Local leaders said the budget problem is partly due to online sales.

"We believe one of the reasons revenue is down when our population is up, tourism is good is because of internet sales," said Chris Morrill, Roanoke City Manager.

In an effort to balance the budget, officials proposed curtailing spending by $4.3 million. Part of the plan includes delaying building maintenance, holding back on equipment purchases and reducing the amount of money going to the school systems by nearly $1.47 million.

A spokesperson for the Roanoke City Public School system said school leaders have known about the shortfall for a while. They said it is too early to tell the potential impact. Morrill said the city's goal is to balance the budget without hurting services.

"Most years we beat our revenue targets and the schools get more money. This year we will not meet our revenue targets, so the schools will get less than what's in the original budget," said Morrill. "However, the schools get to keep any excess revenue they earned over the year. So they have a balance that they could actually dip into."

Roanoke City Council is urging Congress to enact legislation to allow state and local governments to collect money from online retailers.

"In 2015, over $30 billion was not collected that states and local governments could have used for education, for infrastructure and those critical services," said Morrill. "Even more importantly those bricks-and-mortar businesses, those who are owned and their employees are our friends and neighbors, they are at a disadvantage to internet companies that don't pay sales taxes."