Flaggs says budget will help determine recovery
Published 9:51 am Thursday, April 16, 2020
As he considers possible changes to the city’s March 25 civil emergency declaration, Mayor George Flaggs Jr. is taking a close look at the city’s bottom line.
The mayor is expected to announce changes to the emergency declaration at a 2:30 p.m. press conference Friday that will be broadcast live on The Vicksburg Post’s Facebook page. He said the city’s economic situation will influence whatever announcement he makes.
“I’m waiting on a lot of data between now and Friday,” he said. “I’m going to be looking at a lot of spreadsheets.”
Flaggs said it is hard to tell how much revenue the city could lose this fiscal year because it is in the middle of the second quarter of the year and the revenue for that period has not been reported. Two of the potentially impacted months, February and March, are in the second quarter.
The city receives an 18.5 percent share of all state sales taxes collected within the city limits. Because sales tax revenues run two months behind, the city’s sales tax disbursement from the state for February is due in April and the March disbursement in May.
“We will feel the impact of the virus on sales tax starting in May when the March reimbursement from the state comes in,” he said.
Presently, Flaggs said, business license tax revenue is down $1.3 million and automobile sales taxes are down $46,000. Building permits were down $47,000, but gaming revenue was up $85,000. He said sales tax revenue for the first four months of the fiscal year was down about $67,000.
Revenue from the 2 percent hotel and food and beverage tax, for the Sports Force Parks on the Mississippi, Flaggs said, is up about $215,000 for the facility on Fisher Ferry Road.
The increase, he said, is because people, who were in the Vicksburg area working the shutdowns at Ergon, International Paper and Grand Gulf Nuclear Station, booked rooms at hotels within the city.
The sales tax revenues from February and March, Flaggs said, are not the only unknown fiscal issues that could affect the city.
“We don’t know exactly how much money the governor will allocate from the federal $1.4 billion in stimulus money,” he said. “Then, we don’t how the Legislature will make the county and municipal government whole because of the loss of revenue. We probably won’t know anything until after the Legislature goes back in.”
Also, Flaggs said a lot of people may not be paying their property taxes because they are currently not working as a result of the economic slowdown brought about by the threat of the COVID-19 virus.
“It may be a last-minute thing. They have to have their property taxes paid by July 1,” Flaggs said. “They’re not working, so maybe they’re hedging their bets and waiting until the last minute to pay property taxes with some minor penalty.”
Flaggs said the state has not indicated how much it will reimburse cities for hazardous pay for employees.
“I’m told they may reimburse us (for) 14 days, and ours is going to be about three weeks,” he said.
Under the emergency declaration, the city’s workforce was reduced and employees not considered essential were placed on rotating shifts. All employees received their paychecks, with those working paid overtime. City employees are currently scheduled to return to work Monday.
The cost of the salaries, Flaggs said, may not affect the city until the last quarter of the fiscal year.
“Then we may have to do some budget amendments to replenish some of those personnel budgets,” he said. “I’m prepared to look very hard at replacing anybody who retires, any position that may come available or open, to not replace those positions.”
“We’re already not going to take off on the 27th (Confederate Memorial Day), and we’re seriously looking at not taking off on Memorial Day,” he said.
If he can get a good idea of how much the federal and state governments are going to reimburse the city, he said, “Then I have a better idea of how we can fund the rest of the city government for the rest of this year.”
Flaggs also wants to see how the state will deal with the casinos, which the state Gaming Commission closed March 16. Flaggs said gaming revenue accounts for 16 percent of the city’s budget.
One thing that will help the area’s economy, he said, is the influx of federal assistance to individuals — if the money is spent with local stores.
“There’s a lot of money out,” he said. “I’m hearing folks calling me and saying their stimulus money was in their bank account; everybody who’s unemployed got $600, our city employees get the stimulus money, (and) they got paid.
“All this has got to go into the local economy. Hopefully, they’ll spend local. If they spend locally, our economy will come back sooner rather than later,” Flaggs said. “I’m encouraging everybody, if you can buy local, where we can, as best we can, we can recap a lot of that sales tax loss.”
Flaggs believes, however, the city has enough stopgaps and safety measures in the system “that I think we will be able to recapture and manage the workforce and the personnel costs.”