Athens is among the many local governments across the country assessing its financial outlook following the COVID-19 partial economic shutdown.

Both Athens City Manager C. Seth Sumner and Finance Director Mike Keith addressed the topic in some detail at last week’s Athens City Council meeting.

The COVID shutdowns began in mid-March and sales tax revenue in Athens was down by nearly $28,000 for the month. That trend continued in April with the city experiencing a nearly $7,000 decrease in sales tax collection versus the prior year.

A positive trend began in May when Athens sales taxes totaled over $33,000 more than in the previous year. The uptick continued in June with more than $37,000 in sales tax revenue versus the prior year. Sales tax revenue is usually reported about two months after each monthly collection period.

Keith referenced a meeting held by the city department heads on March 17 regarding the potential impact of COVID.

“Ever since then, we’ve talked about how it impacts our revenues and expenditures,” he said.

Keith anticipated at least an 8% loss in sales tax revenue for the 2020-21 fiscal year. Keith also expected that property tax revenue would be reduced by as much as $250,000 due to equalization.

“We prepared for everything,” said Keith. “We just hoped that things wouldn’t be in shambles.

“I sit here six months later and we’re looking at sales tax doing just the opposite of what we expected,” Keith continued. “We’re very grateful for that.”

Keith said it is difficult to project what these early numbers will mean for city revenues over the long term.

“I wish we had something reliable to tell us, but everything we’re going on is on history and what people are thinking,” he said.

Both Keith and Sumner said the city will continue to be cautious with its budgeting until its fiscal outlook becomes more clear.

“The important thing for us to continue to be cautious about in looking at sales tax revenue is development is down,” said Sumner. “Expanding retail operations is slowing nationwide. The cost of construction, especially with lumber, has risen 35% in just the last few weeks.”

Sumner said he plans to focus on three main areas affecting city finances in the coming months: The impact of the federal Paycheck Protection Program (PPP) on small businesses; how federal stimulus money has been utilized locally; and the effect of enhanced unemployment benefits.

“We’re still seeing an over 9% unemployment rate here locally,” said Sumner. “We are watching those three main factors I just revealed and that will still have to work its way through our local economy until we can get an actual snapshot of what post-COVID looks like for our economic condition.”

Email: andy.brusseau@

dailypostathenian.com

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