Future of local government budgets during COVID-19

Posted at 5:59 PM, Mar 31, 2020

COLORADO — The impacts of COVID-19 are being felt in many industries and everyone's day to day life. While government operations are essential during a time of crisis, a few cities across the United States have furloughed hundreds of workers.

Cities such as Cinicinnati, Ohio, Norfolk, Virginia, and Wichita, Kansas. Cincinnati furloughed 1,700 city employees, according to KOAA's sister station WCPO.

Local governments in southern Colorado say they're not looking at leaving workers without pay in the near future, in many cases it's the last resort when it comes to saving money.

"Obviously what we're working on is trying to get through this medical crisis," said Pueblo Mayor Nick Gradisar. Pueblo currently has about 850 employees on the payroll and about 25 percent of them are now working from home.

For Gradisar, leaving employees without work or pay- isn't the solution.

“We don’t want to exacerbate the economic situation by making people unemployed at this point," said Gradisar. While not on an official hiring freeze, the city of Pueblo is not conducting "civil service tests" which are used as a prerequisite in the hiring process.

Gradisar says while not every position can be done remotely, employees are working on projects outside of the office such as coming up with best practices for the office as the crisis continues.

"This is one of the reasons why governments have reserves, why we have TABOR reserves and if we can't be used for a crisis like this I don't know what it can be used for," Gradisar said. Pueblo, which like many cities relies heavily on local sales tax for revenue won't know how big of a hit the economy has taken until June.

This is also the case in Colorado Springs as it takes a couple of months from when the collection periods end. During a press conference Monday afternoon, Mayor John Suthers announced he's asked department heads to come up with plans to cut $20 million in the cities budget.

A spokeswoman for the city tells News5 department heads sent suggestions for cuts last week, the budget cuts are operational costs and not personnel. City of Colorado Springs has also taken additional steps, such as a hiring freeze, banning travel and deferring non-essential travel. Between those actions and the proposed budget cuts, city leaders believe they'll be able to balance the 2020 budget with the expected economic impact.

The city is also delaying capitol improvement projects, which include maintenance on city buildings, pools, and repair on the Julie Penrose fountain.

If Colorado Springs does make any layoffs or furlough any workers, it would likely happen later on after they get a better idea of the hit the economy takes.

The uncertainty is what's causing local governments to focus on what's in front of them right now, versus what's to come.

"We don't know where we are at this point in time," said El Paso County Commissioner Mark Waller, who adds the county isn't in as tough of a spot as the city because the county primarily relies on property tax revenue versus sales, "Our finance people are running models and doing everything they can to try and understand what this is going to look like."

Mayor Gradisar says once they see the numbers come June, they'll have a better idea of the direction the budget needs to go, "we just don’t know the nature or how long it will last. I’m hopeful this will be a short term problem and the economy will rebound robustly."