“On the financial side, the COVID-19 pandemic will be impactful,” he said.
Fort Worth city officials estimate that sales tax revenue, which makes up 22% of general fund revenue, may fall short by up to $26 million in the second half of fiscal year 2019-20—from April 1 through Sept. 30.
According to a recent Fort Worth Chamber of Commerce survey of more than 1,200 local businesses, revenue has decreased by more than 80%, said Robert Sturns, city of Fort Worth economic development director.
“The one thing that small businesses are really being impacted by is access to capital,” Sturns said. “A lot of small businesses do not have the wherewithal to operate more than 30 days without income coming in.”
On average, for the city of Fort Worth, sales tax revenue adds up to more than $170 million annually.
Other city entities, such as the Crime Control and Prevention District, which rely on portions of sales tax revenue, are expected to lose up to $12 million in funding during FY 2019-20.
The city is also estimating a loss of at least $17 million from other revenue sources, such as development, fines and public events.
City staff has seen reductions of 18% in building permit activity and 36% in platting activity, according to a city news release. If the trend continues, general fund losses will range between $2.2 million-$3.6 million, the release said.
Additionally, the city is projecting losses in the range of $15 million-$25 million from the cancellation of public events, the release said.
The silver lining, Cooke said, is that the city was in a strong financial position before the spread of the virus began.
“Throughout this pandemic, we have been and will be out there providing needed services to our residents,” Cooke said.
Along with utilizing the federal Coronavirus Aid, Relief and Economic Security Act, which could provide up to $166 million in aid to the city, Fort Worth officials have outlined a number of strategies that may be used to help mitigate revenue loss, such as:
- Discretionary spending freeze;
- Evaluating or postponing capital projects;
- Prioritizing programs and services; and/or
- Hiring freeze for city personnel, except police and fire.
