City, school district take look at possible COVID financial fallout
At an April 22 press conference, Lt. Gov. Jon Husted said the state of Ohio had lost about 1 million jobs since March 15.
He said the state relies largely on income and sales taxes, and as people lose jobs, income tax suffers, and as people aren’t shopping, sales tax suffers.
Both the city of Harrison and the Southwest Local School District also rely on income tax revenue to provide services to the community, and with many people out of work, both organizations expect to see decreases.
At the moment, Finance Director Cathy Stockhoff said she is anticipating to possibly receive 15 percent less than expected in income tax revenue for the year.
Hamilton County Auditor Dusty Rhodes has also advised fiscal officers to possibly anticipate at least a 10 percent reduction from last year’s second half property tax revenue, which Stockhoff assumes will be due to delinquencies with residents not paying their taxes.
Stockhoff said revenue from the gas tax could also be down because gas prices are lower and residents aren’t purchasing as much gas.
Gov. Mike DeWine had previously ordered state agencies to work to cut unnecessary spending up to 20 percent for the remainder of this fiscal year and next fiscal year, and Stockhoff said it’s possible that these cuts could affect the city through local government funds.
She said there are many moving variables, and it’s hard to determine what direction to go, especially since they aren’t yet seeing the revenue impact of the stay-at-home order.
But, the mayor has already asked department directors to cut out all non-essential expenditures, which will save the city about $114,000.
Southwest Treasurer Thomas Lowe said the district was already planning to make cuts of about $300,000 to $500,000 in each year of their five-year forecast, so the situation with COVID-19 isn’t making things better.
Lowe said the earned income piece will be a huge hit for them, and they are projecting a possible 10 percent decrease in income tax revenue.
Lowe said he thinks they will also see a one percent reduction in property tax revenue, and it’s highly likely that they will see at least a five percent reduction in state funding for next year.
He said he has also heard there could be a five percent reduction in the state allocation for the current year.
But, similar to the city, Lowe said there are many unknowns and these are all educated guesses at the moment, and it’s possible that a year from now, the district is talking about cuts because of COVID-19.