Mayor George Flaggs Jr. believes the city should be able to stay within its operating budget without layoffs and drastic pay reductions.

“I’m cautiously optimistic that we won’t have to have a massive layoff to be able to make these revenues up,” Flaggs said Monday.

He added employee salaries will not be affected.

Flaggs said, however, the city would have to take a close look at donations and expenses for advertising. As employees leave, he said, “We’re going to look at those positions and determine whether we need those positions, not just for the quarter but for the duration of the next fiscal year.

“We’ve got to worry about next year, too,” Flaggs said. “We’re going to look at some of the (capital improvement) bond money (to help the budget).”

Flaggs discussed the city’s financial situation at Monday’s meeting of the Board of Mayor and Aldermen. Monday was the deadline he set in May to announce any plans to reorganize city government in the wake of a projected $2.8 million shortfall caused by changes in the economy due to the COVID-19 virus.

He said the city’s financial picture looked better, announcing the city’s estimated deficit has been cut by almost $500,000, from $2.8 to$2.2 million.

The $456,866 represents the total of the difference between sales tax projections for March and April and the actual sales tax revenue for those months and gaming revenue for April and May.

The state of Mississippi reimburses the city 18 percent of the sales tax revenue collected each month by city merchants. Sales tax revenues run two months behind, meaning the city received its reimbursement from the state for March in May.

City accounting director Doug Whittington said the March 2020 sales tax revenue was estimated at $523,270, or 75 percent of the tax revenue for March 2019, which was $697,693. The city’s actual tax revenue for March was $672,295 — $149,026 more than the estimate.

April 2020 sales taxes, received in June, were estimated at $321,913, or 50 percent of the April 2019 reimbursement of $643,826. The April reimbursement from the state was $608,550 — $286,636 more than the estimate. The city will get its May sales tax reimbursement in July.

The city received $10.42 cents from the April gaming tax and $21,194 from gaming in May.

“Given that the Legislature is probably going to address it some kind of way, I think you will see another reduction in that number (the deficit),” he said. “I think Congress is going to something different in the way of another stimulus package which will include state and local government.”

He also said the city may receive help through the Coronavirus Aid, Relief, and Economic Security, or CARES, Act for help with hazardous duty pay.