The requirement that people stay at home and businesses close or reduce hours is effecting finances for business, government and individuals alike. Municipalities face a loss of sales tax, parking fees, tourism income and other revenues. Burlington, Vermont Mayor Miro Weinberger provided a “bad case” budget scenario to the city council this week.
Mayor Weinberger first outlined Burlington’s budget projections during a public afternoon briefing.
The Democrat says the $62 million general fund budget that provides core funding for police, fire, library, parks and recreation and fundamental city services has been seriously impacted by the COVID-19 emergency. He expects the impacts could continue for up to two years. “We have been working on a plan to respond to the emergency. The basic challenge that we're confronted by is that because of that loss of tourist travel, because of the fact that our bars and our restaurants and hotels are closed or near closed right now, and because we're not getting other revenue of that sort, whether it's marina revenue or visitors at the city’s campground, we are expecting $5 million in the remaining months of this fiscal year to be just lost and unrecoverable and approximately $10 million in FY ‘21 to be in the same place.”
Weinberger said his administration is hopeful the city can receive some federal support. “One of the big debates of a fourth major relief package from Congress to respond to the Coronavirus epidemic is over whether municipalities and states are funded in that bill. I think the case is pretty clear that municipalities, just like these other industries, need help through this period. If we don't get it we will have very serious cuts that we will have no choice but to make.”
At the evening City Council meeting, conducted virtually, Weinberger said he was presenting not a worst case, but rather a bad case, budget scenario based on the city receiving no federal support. Three strategies were outlined to address projected deficits. Weinberger said he is reluctant to use deficit borrowing, but it is an option. The city has begun cutting expenses and more will need to be considered. The other potential option is using the city’s $13 million reserve, or rainy day, fund.
Central District Progressive Councilor Perri Freeman acknowledged the crisis but is concerned about the level of cuts that could be necessary. “I'm concerned when any recessions like these happen that we will turn towards austerity. It would be incredibly frustrating if we had to make cuts. I feel like austerity is always framed as the necessity we have to make cuts when it's not necessary. But I just really want to push back and really take a stand against that because it's, it's, it's unreal the kind of inequality that has just been able to permeate and continues to impact people.”
Ward 7 Independent/Progressive Ali Dieng had hoped there would be more than one scenario put before them. “The scenario that we have in front of us is a bad scenario. But I was just wondering, knowing that also the economy is starting to open up a little bit, even throughout the nation. And also knowing that also China their economy is coming back normally, you know, I wanted to see basically at least three scenarios in order for us to say, hey, let's choose this one or let's focus on this scenario to move us forward.”
Mayor Weinberger’s COVID-19 afternoon update 4/27/20:
Burlington City Council and Board of Finance Meeting 4/27/20: