County and towns expect shortfall due to virus outbreak

    Local officials are bracing for the financial impact of the COVID-19 pandemic.
    Lawmakers are in the process of crafting a budget for the 2020-21 fiscal year, which begins July 1. Officials say revenue lost due to Stay-at-Home Orders and business shutdowns may delay projects that had been in the works.
    Cherokee County officials expect a decrease in sales tax revenue for the last quarter of this fiscal year, compared to April-June 2019. They also expect a revenue decrease next fiscal year.
    “The county can expect to see shortfalls in sales tax and other revenue streams as well,” County Manager Randy Wiggins said. “A lot will depend on the long-term effects of unemployment, economic confidence, permit fees and property tax collections.”
    Officials say it is too early to determine the severity of the shortfalls.
    “We are still working to develop those forecasts,” Wiggins said. “This is such an original issue there just is not a lot of information or data out there to help us have a clear understanding of what all the impacts will be, to what level those impacts will be and for what duration those impacts may last.”
    Lawmakers have not delayed any projects due to the coronavirus outbreak. Officials plan to delay non-critical capital expenditures.
    “We will be looking at where we can reduce expenditure, where we can offset revenue loss and how much of our fund balance we can use to offset a loss while still maintaining a responsible balance,” Wiggins said.
    Meanwhile, the Town of Murphy has already felt an impact from a loss in water and sewer revenue, which will likely burden much-needed infrastructure upgrades.
    “With the casino, hotels, restaurants and other customers closing their doors or changing their operations in March, our water and sewer fund will take a hit,” Town Manager Chad Simons said. “It’s too early to tell how bad it will be. It’s concerning because there are so many fixed costs associated with providing water and sewer service, and our system is aging.
    “The maintenance problems will not go away just because we are experiencing a pandemic.”
    Murphy lawmakers expect the impact on sales tax to be felt after July 1 because local sales tax distributions are three months behind. Officials say the town’s general fund balance is in “healthy shape” and will likely fill any gaps from a decrease in sales tax revenue. However, they expect to feel an impact from property tax losses.
    “Our main source of revenue, the property tax, will likely experience a lower collection rate if our economy struggles to get back on its feet this year,” Simons said.
    Murphy officials plan to evaluate projects next month as they draft a budget.
    “We have a strong financial foundation and momentum elsewhere with our new Downtown Associate Community Program,” Simons said. “All of that comes into play in terms of resources.”
    The Town of Andrews, whose finances have been monitored by the state’s Local Government Commission since 2017, expects a decrease in revenue for this fiscal year and possibly next.
    “Sales and use tax is expected to be the greatest decrease in revenue from the state, but we may also have a local reduction of utility and property tax collection,” Mayor James Reid said. “We will apply for any federal and state grants to cover the shortfall caused by COVID-19, and to help with any projects necessary to support the departments and infrastructure of Andrews.”