HARLINGEN — City officials are projecting losing $1.1 million in revenue this fiscal year as a result of an economic crisis stemming from the coronavirus outbreak that’s led to at least 382 job cuts and 47 businesses shutting down.
Officials expect sales tax and hotel occupancy tax revenue to account
for most lost revenue through September, Mayor Chris Boswell said Friday.
“Obviously, we’re anticipating a shortfall in retail sales tax revenue and probably some other sources as well,” he said.
Boswell said officials are planning to dip into the city’s $20.7 million reserve to help offset the shortfall.
“Because we’ve got our fund balance we’ll obviously be able to weather the fiscal year and beyond,” he said.
At City Hall, City Manager Dan Serna was planning to dip into the city’s $830,493 “catastrophic emergency fund” to help the loss.
Serna said he’s not planning layoffs or furloughs.
“Fortunately for the city of Harlingen, we have a very healthy fund balance,” he said. “We continue to provide our services to our community.”
Serna said he plans to cut expenditures by $206,948, including postponing the purchase of $157,000 City Hall generator along with building and park improvements.
Officials based their projections on a review of the local economy, he said. “We’re dealing with unchartered territory. This is unprecedented,” Serna said. “We don’t have historical data to utilize to develop projections. We have to base projections on the economy.” The city’s Economic Development Corporation conducted a survey showing 382 workers here lost jobs while 47 businesses shut down operations, he said.
Planning for next year
Meanwhile, officials are taking steps to prepare to map out next year’s budget.
“By October 1, we’ll have enough data to better understand what’s going to happen through the course of the year,” Boswell said. “We’ve got five months to understand what the future will look like in terms of retail sales tax. That will allow us to budget for the new fiscal year.”