ST. LOUIS — City revenue fell $21.1 million in the fiscal year that ended June 30, according to an Aug. 3 memo from ºüÀêÊÓƵ Budget Director Paul Payne that offers one of the first looks at the fiscal impact from the COVID-19 pandemic on local government finances.
Much of the impact from the coronavirus crisis and ensuing recession is concentrated in the city’s fourth quarter, when earnings taxes fell 24%, sales taxes dropped 15% and hotel taxes declined 54%.
But relatively strong tax collections in the city in the second half of 2019 appeared to blunt the worst of the pandemic’s financial impact. City revenue for the full year was down just 4% from fiscal 2019. And because of conservative budgeting — the city budgeted $10 million less in fiscal 2020 than it actually collected in 2019 — revenue was just $11 million below the $519.5 million budgeted for fiscal 2020.
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It was a far better result than the $37 million deficit city officials predicted in the midst of the shutdowns in April. Still, Payne called the impact to general revenue, which before the virus had been on pace for a good year, “stark.â€
“At the end of the (third quarter) and prior to the effects of the economic shutdown taking hold, revenues were on a pace to exceed budget estimates by approximately $10 million,†he wrote in the memo to Mayor Lyda Krewson, Comptroller Darlene Green and Board of Aldermen President Lewis Reed. “By fiscal year end, this projected excess had turned into an $11.1 million shortfall bringing the estimated impact of the pandemic on general revenue alone to over $21 million.â€
ºüÀêÊÓƵ was able to offset the drop in general revenue by holding the line on expenses, which came in $12.7 million less than budgeted, Payne reported. With some exceptions such as the fire department, most city departments came in under budget, Payne reported.
Boosted by a $5 million payment at the end of the year from the city’s parking fund, the city’s reserve also appears to be in good shape, according to the memo. Reserves stood at about $52 million at the beginning of fiscal 2021. And with the fiscal 2021 general fund budget lowered to about $482 million because of the pandemic, the city’s reserves sit at nearly 11% — above the unofficial 10% goal it had been building toward since the Great Recession.