COVID-19 Could Create Massive Cincinnati Budget Deficit
Cincinnati City Manager Patrick Duhaney sent a two-paragraph email to the mayor and council members Friday predicting massive problems for the city budget.The manager said the economic downturn caused by the coronavirus will cause a general fund budget shortfall for this year, and the deficit for the new year starting July 1 could be $60 to $80 million.
It represents a massive downtown in revenue. Through the end of February, the city collected $24.3 million more in revenue than what was forecast.
"All of this is sad and tragic and we are moving quickly to ensure that we will be able throughout this crisis to provide police, fire, sanitation, and public health services in addition to, of course, clean water and sewer services, essentials that our entire society depends upon," Mayor John Cranley said Friday.
Duhaney and Assistant City Manager/Budget Director Chris Bigham will be working this weekend on a response to present to Cranley and council members.
The mayor would not offer any specifics during a news briefing Friday on the COVID-19 response. He said the city must take temporary, emergency actions to be able to provide basic services.
"Whatever cuts and layoffs that we have to announce on Monday ... we intend for those to be temporary," Cranley said. "If you and others look at what Dayton and Akron have done over the last week, it is similar in that they have asked people to do a temporary leave with the intention of bringing them back when the crisis is nearing its end."
Cranley also said, for now, the city will not use any of the $150 million City Council authorized borrowing last week to cover the budget shortfalls.
Closing a $60 to $80 million deficit without touching the police and fire departments could mean eliminating other departments, many of which are already running lean operations because of previous cuts.
Plus, new revenue options are limited. The city already set the property tax rate for the next fiscal year budget without any increase. The largest source of revenue for the city is the income tax, and it cannot be adjusted without voter approval.