CHARLOTTE, N.C. (WBTV) - Charlotte city council is looking at a big shortfall in tax revenues because of the COVID-19 pandemic. They could dip into their reserve funds to bridge the gap but it could come at a cost.
During a city council meeting Monday night city manager Marcus Jones said the city is expecting big hits in sales tax and hospitality tax revenues. The city is forecasting a possible $11.1 million shortfall in sales tax revenues for FY2021.
The city is facing a potential revenue shortfall of $13.7 million.
“We haven’t even begun to see the long-term impacts of what we’re going to have to deal with here,” Councilman Tariq Bokhari said.
But the city does have cash in reserves. The city has $116 million dollars worth,in reserves, or two months of the operating budget. That could help balance the budget.
“That would be one of the reasons we have the reserves in the first place and our goal is not to go into it,” City Manager Marcus Jones said.
City Manager Marcus Jones was hesitant to recommend spending those funds and some council members were also shy about using reserve funds on disaster programs to help people because of what it could do to the city’s bond rating and what it would mean to diminish reserves.
“I just don’t believe that’s a sound financial policy,” Jones said.
Mayor Vi Lyles said that to replenish the reserves would likely mean cuts to staffing. Council didn’t make a decision on what to do on the revenue shortfalls yet.
During their meeting city council also passed a $1 million micro-business grant program for companies with five employees or less.
They also approved $5.6 million in funds to help families afford rent and mortgage payments as well as housing for the homeless.