From Pasco to Pinellas, Tampa to St. Petersburg, local governments across the Tampa Bay area are entering another budget season.
By Sept. 30, new budgets have to be balanced and approved by city councils and county commissions. But the coronavirus pandemic has scrambled plans and sent budget staffs scurrying to assess the real-time damage to government coffers.
For now, uncertainty reigns.
“At this point, the bottom line is that some of the best economists and some of those who do this for a living can’t agree on how deep it’s going to be or how long it’s going to last,’’ said Hillsborough County Administrator Mike Merrill.
That means decision makers have to make tough choices with incomplete information. However, especially at the county level, the revenue losses are expected to top tens of millions of dollars.
For municipal governments, property taxes make up the bulk of revenue. Most of that revenue has been collected for the current fiscal year, limiting the immediate fiscal damage. The lag in receiving sales tax revenue from the state has also softened the blow. But the delay means most governments won’t know the impact of shuttered stores, restaurants and other businesses until late May.
"The challenge we face is quantifying the level of impact in that unknown,” St. Petersburg Deputy Mayor Kanika Tomalin told city council members last month. “There are still far more unknowns than there are knowns in this piece of our budget management.”
As difficult as assessing the damage to current budgets, the economic fallout from the pandemic greatly complicates planning for the approaching fiscal year.
For county governments, sales tax revenue tied to transportation in Hillsborough and revenue from tourist and gas taxes in Pasco, Pinellas and Hillsborough are all likely to take significant hits — early projections range in the millions.
No local government has yet laid off or furloughed employees or cut pay, but that was a widespread reaction to the Great Recession last decade. Back then, Tampa eliminated 700 positions. Clearwater, 200.
So far, that hasn’t happened in this pandemic-induced recession. But officials aren’t making any promises.
“Nothing is off the table,” Dennis Rogero, the city’s chief financial officer, told Tampa City Council members recently.
In Clearwater, City Manager Bill Horne said staff reductions are likely as the city grapples with the crisis in the coming months.
Here are more details about how the region’s governments are reacting:
TAMPA: No hard data on revenue losses has emerged yet, but the city is committed to maintaining its reserves, a key element in maintaining a good municipal bond rating.
So far, the city hasn’t touched any of the more than $100 million in its general reserves. It has tapped $2 million from its emergency reserves, usually reserved for hurricanes, Rogero said.
“Maintaining that resiliency and a strong firm balance is going to help us keep the city moving. And not only in day-to-day services, but having us prepared to launch on what we need to launch when when the recovery happens,” he said.
So far, the city has delayed implementing body cameras for its police officers, shelving (at least for now) a $5 million contract, which would have spent $1 million this year to equip 600 officers — the first of what Rogero said will likely be many hard decisions.
“If the expenses don’t have anything to do with Parks and Recreation, public safety or public works, then we’re pretty much putting a hold on those,” he said.
ST. PETERSBURG: The city projects it will have at least 90 percent of the current fiscal revenues collected by Sept. 30.
To cover any shortfall, the city plans to tap into an unappropriated balance of $26 million. They don’t plan on using any of a separate $28 million emergency availability fund, officials said.
“Because of our planning, we are prepared, and we are well positioned to face the economic impacts of COVID-19 on our budget,” Tomalin told council members last month.
As Mayor Rick Kriseman told council members last month: “Certainly it won’t be easy moving forward."
CLEARWATER: While the city is still figuring out how bad the damage will be, City Manager Bill Horne said staff reductions are a possibility. The city currently employs about 1,800.
During the worst of the Great Recession, the longtime city manager said, “nobody was spared. Police wasn’t spared, fire wasn’t spared, everybody contributed in some way.”
HILLSBOROUGH COUNTY: The uncertainty is greatest involving spending financed by sales tax collections, including the county’s $812 million transportation improvement plan, the portion of the county budget covering unincorporated Hillsborough and tourism promotion.
For unincorporated Hillsborough, budget planners anticipate a deficit for the 2021 fiscal year ranging from $29.4 million up to $46.8 million.
The county’s $6.65 billion budget includes separate tax rates for property inside its three cities and a higher rate for homes and businesses in the unincorporated areas for emergency services, firefighting, parks and recreation, code enforcement and other departments.
Property tax revenues are expected to be stable for the next 18 months, the budget planners said.
The county had budgeted $118 million in half-cent sales tax revenue from the state and earmarked $86 million of that to the general fund covering unincorporated Hillsborough. It represents 19 percent of the revenue in that budget.
The county also uses two separate half-cent sales tax surcharges, for indigent health care and for the community investment tax that built Raymond James Stadium, schools and other projects. The community investment tax expires in six years.
Budget planners estimate those tax revenues could plummet by up to $40 million in the next fiscal year. Health care and bonds for prior projects should be covered, but the real loser could be local roads and intersections, which had been expected to get up to $150 million from the final six years of the community investment tax.
PINELLAS COUNTY: County Administrator Barry Burton expects significant reductions in tourist tax revenue and monies collected from gas taxes. The tourist tax dollars often typically provide millions for museums and other development projects that draw visitors to the region. Money from gas taxes help pay for roadside maintenance and street improvements.
In recent years, Visit St. Pete/Clearwater has broken records for the tax dollars it collects from tourists and others who stay in the county. The money is also used to promote the county across the globe. Burton said it’s possible the county might have to shift money between spending priorities.
“It’s hard to predict the long term impact,” Burton said.
PASCO COUNTY: Pasco County administrator Dan Biles told county commissioners last week that he was already practicing fiscal belt tightening.
He estimated general fund losses of up to $5.75 million by the end of the fiscal year due to big dips in tourism, gas tax revenue and a slowdown in transportation and construction.
Biles has begun a soft freeze on hiring non-public safety workers and he’s given some county offices an extra month to prepare their budgets to get a better idea of the economic landscape.
With tourism down, Biles told commissioners "we need to have a very robust marketing plan as we come out of this to get this turned back around.''
Contingency plans are underway including prioritizing transportation and capital projects, he said.
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