Worthington budget report: Coronavirus puts dent in income-tax revenue
The COVID-19 coronavirus pandemic is taking a bite out of the city of Worthington's finances, according to local officials.
In his mid-year address to Worthington City Council on July 13, finance director Scott Bartter said the city is seeing a decline in income-tax revenue.
He said he expects the trend to continue because of the coronavirus, meaning the city will finish with $1.6 million less from 2019 income-tax collections of $26.4 million, about a 6% decrease. The original 2020 estimate for income-tax collections was about $26.1 million, he said.
However, Bartter said, he is optimistic the later filing deadline for tax returns, delayed from April 15 to July 15, will result in more income-tax revenue collected later in the year.
"Things can change," he said. "We just don't know."
He said the city was expecting around $34 million in general-fund revenue this year.
Meanwhile, Bartter said, he expects income-tax revenue to increase 5% next year and, by 2022, return to the originally estimated 2019 collection levels.
He said he is optimistic the coronavirus will be more under control and the economy, which has been improving, will continue to do so.
The budget also is being affected by the continued vacancy of the Anthem Inc. building at 6700 N. High St. and the demolition of the local Holiday Inn, which was expected to be replaced by a Tru by Hilton hotel in the new Worthington Gateway development at the corner of High Street and Wilson Bridge Road, Bartter said. However, the developer, Witness Group, nixed the plans in April after saying the hotel market was soft during the coronavirus pandemic.
The city has made some cost reductions, for example, by rejecting any expansion of services, leaving five city positions open until further notice and furloughing part-time employees, Bartter said. He said the most significant cost-reduction measure is holding the five positions vacant, but he did not yet have specific figures on the resulting savings.
For other cost reductions, more than $425,000 in departmental budget requests were not funded in both 2019 and 2020 budget cycles, according to Bartter's presentation.
One of the biggest hits to the budget came from the Worthington Parks and Recreation Department, which has decreased revenue after the closing of the Community Center, summer camps and other money-making activities, Bartter said.
"As of June 30th, parks-and-recreation revenue is down 43%, or $545,993 from (year-to-date) June 2020 estimated revenue of $1,260,340," he said.
Bartter said when the closures began, he expected the department's revenue to be down 16% -- or $370,000 -- by the end of the year, and returning to 2019 levels next year. Total parks-and-recreation revenue in 2019 was $2,375,332, he said.
However, as restrictions have continued, he said, he now believes that figure will be low.
The lack of income-tax revenue also affects the capital-improvements budget for 2020 to 2024, Bartter said. The city, for example, will delay several projects, such as the Community Center pool resurfacing, the Selby Park playground replacement and McCord Park renovations.
"The whole thing is a big wait-and-see game," he said. "There's a lot to it, but it's very fluid."
Council President Bonnie Michael said that city officials must continue to tighten their belts and focus on economic development.
When asked about the potential for asking voters to approve a tax increase, Michael said that option would be premature at this point.
"I think things are coming along OK," she said.
"If we're going to do something, that wouldn't happen fast. Something like that would be deliberate, and something like that would include a lot of community dialogue."