By JAN LARSON McLAUGHLIN
BG Independent News
The coronavirus pandemic is wreaking havoc on businesses and individuals. But that economic bad news is trickling down to local governments which are waiting to see how much their budgets will shrink from the pandemic.
For the city of Bowling Green, the big hurt is expected to be felt in income tax revenue. As city residents make less during business shutdowns, the city will collect less income tax. How much less is yet to be known, since those revenues usually lag a couple months, according to Assistant Municipal Administrator Joe Fawcett.
And that’s just the beginning of the pain for the city budget. It’s too early to assign numbers to the losses. But here’s where else the city is watching its traditional revenue dry up.
Utility usage unplugged
Since Bowling Green operates its own electric, water and wastewater utilities, the city feels the drop in usage right away. Unlike private utilities, the city rates are defined by the cost of services, so there is little cushion.
As Bowling Green State University and several manufacturers shut down sites, the city saw a plunge in electric and water consumption. Less power going out means less money coming in, Fawcett said.
The electric consumption has dropped about 25%.
“That is going to affect the city,” he said.
Some of the manufacturers that didn’t close, did cut operations from multiple shifts to just one, Fawcett said. And BGSU’s move to online courses had a huge effect beyond the classrooms.
“There were no students on campus running hairdryers or microwaves,” Fawcett said, explaining that all the small uses add up the city’s utility revenue.
Parks and recs rocked
Parks and recreation programs are on standby, which means no fees are being collected. The community center is shut down, and members have been promised some type of compensation for their memberships during the closure.
No decision has been made yet if the city pool will be open this summer, and most seasonal hires are on hold. Meanwhile, the city’s newly completed Veterans Building in City Park can’t be rented out for use since people are advised to not gather in groups.
Check-ins checked out
The city’s hotel-motel tax has been put to bed during the pandemic, with very few people traveling, and even fewer staying at motels. That tax helps fund the city’s Convention and Visitors Bureau.
“Clearly that will take a dramatic drop,” Fawcett said.
No gas guzzling
At the same time, revenue from the gas tax has stalled out, meaning less funding for road work. If the state is collecting less gas tax revenue, it has less to distribute to local governments.
A fine time – not
Also involving driving, the city is collecting very little from police enforcement of speeding laws or other fines. “We don’t know exact amounts or percentages,” but it will be in the loss column, Fawcett said.
Parking kiosks on hold
The delayed kiosks for downtown parking lots have been put on hold even longer. They were ready to go online just as the pandemic hit.
“We made the decision that we’re not going to reinstitute a parking fee,” when downtown businesses are already suffering, Fawcett said. “I’m guessing it’s going to be quite some time before we do. We want to be helpful to businesses.”
Fire and EMS runs cooled
Local citizens have followed requests that they call 911 only in cases of genuine emergencies during the pandemic. So fire division runs have dropped during the pandemic.
Interest rates dip – again
Just when local governments were enjoying a small rebound in interest rates, the bottom fell out of them. That’s “great for a borrower,” but bad for local government, Fawcett said.
Plans put on hold
The city had some big plans on the horizon – for a new fire station and a new city administration building. They are likely to be put on a back burner – way back.
“Those plans were in the infancy stages,” Fawcett said. “They very well could be impacted.”
Help is on the way?
Stimulus money to help local governments weather the pandemic comes with some pretty tight strings – which are strangling efforts to use it effectively, local officials have said.
“They made it virtually impossible for government to use the money,” Fawcett said.
And Local Government Funding from the state, which has been cut in recent years, will probably be cut again, he predicted.
The good news for local residents is that the city is not planning any cuts to core services.
“The mayor’s been pretty emphatic that essential services will be maintained,” Fawcett said.
The trash and recyclables will still be collected, lights will still turn on, water will still come out of faucets, wastewater will still be treated, police will still patrol and firefighters will still show up when called.
“Their services will remain unchanged,” he said. “They will still be the services they have come to expect. Even during these difficult and unpredictable times, that’s one thing they can rely on.”
But the reality is that some of the services provided by the city are costing the same amount – even as they are bringing in less revenue.
So it’s possible the city will need to cut jobs – but only as a “last resort,” Fawcett said.
“We are not to the level of identifying job cuts,” he said. “But obviously, that is floating around. That is certainly a potential here.”
