PITTSBURG, Kan. — The City of Pittsburg — like many other government bodies from the local up to the federal level, not to mention businesses — is likely to see a serious financial impact from the COVID-19 pandemic. As of this week, however, this is not yet reflected in official financial reports.
Director of Finance Jamie Clarkson presented the bi-monthly budget review at Tuesday’s Pittsburg City Commission meeting.
“As of April, everything is looking good,” Clarkson said.
“All the funds are healthy as of April 30,” he said, adding that the only visible effect of mandatory closures in response to the coronavirus so far was that revenue from Kansas Crossing Casino — which usually provides about $30,000 a month for the city — was cut to half that amount in March.
Clarkson noted that the city started off 2020 with healthy reserves in its various funds.
“We’ve got one more big tax distribution from the county coming in June, should be the second half of property taxes. I’ve been in contact with the county treasurer. He’s supposed to get with me later this week to let me know how the taxes were coming in that were due on May 10. He’s still working on those numbers,” Clarkson said.
“With the COVID situation, people getting laid off or furloughed at the restaurants and some of the retail and all that, I was worried that they, you know, might not pay their taxes on time,” Clarkson said.
Another concern is sales tax revenue, which lags two months behind the time it is actually collected from customers at local businesses in city reports. February sales tax revenue was up from the same time last year, but March sales tax revenue would probably be “a different picture,” Clarkson said. How different of a picture won’t be clear until the end of May, and April sales tax numbers won’t be available until the end of June.
Clarkson said another factor to consider is liquor tax.
“The liquor tax is only generated by liquor by the drink, which is bars and restaurants, so if the bars and restaurants are closed, they’re not going to be generating liquor tax,” Clarkson said. “Same thing with the casino, there will be no liquor tax being generated while the casino’s closed.”
In response to a question from Commissioner Patrick O’Bryan, Clarkson said tax on liquor sold at liquor stores goes to the state, rather than the local government. Clarkson offered to give another update next month, considering the financial impact of the coronavirus crisis, rather than his usual bi-monthly budget review, but City Manager Daron Hall said anything before the end of June would likely “have way too much gray in it.”
By the end of June, Hall said, the financial impact of the virus shutdown on the city should be clearer.
“Here’s the ugly,” Hall said. “We’ve already taken the budget way down. We have a hiring freeze, just so everybody knows, we have a salary freeze, we’ve furloughed some part-timers, and we’re all watching the federal government to see if they give us any revenue relief.”
If the federal government can provide some relief, the city will probably not be in too bad of a position, Hall said, but “in order to make up money, you need time, so whatever damage has been done to our revenues beyond what we’ve already projected, we’re going to need time to cut expenses for — hopefully from July 1 on will get us what we need.
“So that’s why the last two weeks of June is critical because we’ll get the number on what we didn’t get in April in taxes, and then it’ll give us a chance to decide what we need to do by July 1 in order to have enough time to actually address the damage,” Hall said.
“But we also realize that every business in this town and every entity in this town is going through the same thing we’re going through, so we’re not saying ‘boo-hoo, the city.’ The city’s going to be here, the city’s going to work with whatever revenue we have.”