New Albany's 2021 budget shows toll of COVID-19
New Albany will continue to face a downward financial trajectory in 2021 as long as the COVID-19 coronavirus pandemic continues unabated, according to budget documents for next year.
As a result, even with national officials saying a vaccine could be available across the U.S. in the next six months, New Albany City Council is playing its hand conservatively and plans to spend about $1.2 million less in 2021 than in 2020.
City Council, which approved its general-fund operating budget Dec. 1, is planning to spend $23.4 million, leaving an estimated $2.2 million in reserve, according to the budget documents.
Mayor Sloan Spalding, a voting member of council, said the city is weathering the storm quite well.
“We’ve been very fortunate in New Albany; (we have) had a lot of success with business growth, and that has allowed us to provide the high level of services people have come to expect,” Spalding said. “We’re not cutting services. There are some communities that don’t have that luxury or choice.”
As expected, the coronavirus made the city lighter in the wallet by $1.8 million, reflecting a drop in income-tax receipts, where the city makes 80% of its income, said Scott McAfee, a spokesman for the New Albany.
Although that left the city with a healthy $3.3 million in the black, pre-coronavirus-estimated general-fund revenues were $5.1 million, he said.
Because more than 80% of the city’s general-fund revenues are from income taxes, any loss in jobs within the community or adjustment to a company’s net profits impacts the bottom line, McAfee said.
The city’s hotel and motel bed-tax revenues also were down an estimated $200,000, and income on interest also fell by roughly $300,000, per the budget documents.
Looking forward to 2021, the $2.2 million remaining would not include about $4 million before interfund transfers or money used to buy capital equipment and fund capital projects, for example, City Manager Joe Stefanov said.
On the plus side, the city didn’t furlough or lay anybody off or leave vacant positions open, McAfee said.
“We definitely benefit from having a diversified and thriving business park, but COVID-19 has negatively impacted our bottom line,” he said.