The Greensboro City Council is facing a projected $7 million deficit in the preliminary budget figures for the general fund for fiscal year 2020-2021, which beings July 1.
At the City Council virtual meeting on Tuesday, May 5, City Manager David Parrish described it as a “tough and unusual budget.”
Assistant City Manager Larry Davis walked the City Council through the preliminary figures, which include a general fund budget with $311.8 million in expenditures and $304 million in revenue. The “Funding Gap” was listed as $7 million, but at $7.8 million most of the time that would be rounded up to $8 million.
The general fund is the largest fund in the city budget, which this year totaled over $566 million.
The reduction in revenue compared to the projections made prior to the coronavirus crisis, which shut down the economy, is 3 percent.
The big drop in revenue is from a reduction in the amount of sales tax revenue that the city expects to collect. The reduction in sales tax revenue is listed as 3 percent but Davis explained that figure already takes into account the expected reduction in this fiscal year, which is about 3 percent. He said on a year-to-year basis, from the current year’s original projection to the projection for the 2020-2021 fiscal year, the reduction is about 6 percent to 7 percent.
Davis said, “The departments have been asked to be creative and original” to deal with the severe economic downturn.
Although the projected budget deficit in the general fund is $7.8 million, when Davis got to the projected cuts to move toward a balanced budget, they equaled $5.6 million, which means even if all the suggested cuts are made the City Council will have to find an additional $2.2 million in cuts.
The suggested cuts include $535,000 for participatory budgeting projects, $1.18 million in delayed maintenance, $290,000 million in delaying the next class of firefighter recruits, $500,000 in street light funding, $1.5 million to co-locate services of some departments, cutting travel and training by $400,000 and reducing insurance premiums by $600,000.
And that is just in the general fund. The transit fund for the Greensboro Transit Agency (GTA), which runs the public transportation services, is projected to have a $1.4 million deficit in 2020-2021.
The Greensboro Coliseum and Tanger Center funds are projected to have a $3 million operating deficit, which will be covered with a $3 million transfer from the general fund.
The city is also expecting a considerable reduction in revenue from the hotel/motel occupancy tax since room booking is down from 60 percent to 85 percent.
If there was any good news, it is that the proposed water rate increase of 4 percent for 2020-2021 will be delayed.