Roanoke City projects nearly $8 million in lost revenue due to COVID-19
City’s budget will be impacted for at least the next 2-3 years
ROANOKE, Va. – Coronavirus is not only having a huge impact on the public’s health, but also on everyone’s wallets.
Millions of people are now unemployed across the country and businesses are forced to close, which means local governments are not getting as much revenue.
Roanoke City leaders said there are still a lot of unknowns over exactly how much of a financial impact COVID-19 will have on the city’s budget.
However, they project nearly $8 million in lost revenue for Fiscal Year 2020 because not as many people are shopping, eating out or staying in hotels.
During a virtual council meeting, city council discussed the FY20 budget shortfalls and expect the city’s budget will be impacted for at least the next 2-3 years.
Roanoke City leaders said they don’t want to rely on any state or federal disaster funding that might come in when balancing the budget.
In order to cut down on expenses, the city enacted a hiring freeze except for public safety and social services employees. The city is also holding off on spending nearly $1.2 million in fleet replacement and holding off on nearly $3 million in capital project funding.
The biggest loss in revenue comes from:
- 50-75% loss in sales tax
- 50% decline in business licenses
- 85% loss in transient occupancy revenue
- 90% decline in revenue from prepared foods & beverage
Unfortunately, Roanoke City Manager Bob Cowell said that lost money has a trickle down effect.
“The problem is with the lost revenue that we have, we know we have expenses that are going up fairly dramatically," said Cowell.
Other counties and cities expect their budget will be impacted too.
Roanoke County and Danville both say it’s still too early to project the budget shortfalls. They’re waiting on the details of the federal and state funding that’s on its way.
Salem said the city is crunching the numbers everyday. Salem started a hiring freeze on March 24, suspended all business travel, and is only making essential capital purchases until June 30.
Roanoke City Council also agreed to extend the personal property tax deadline to June 30.
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