News

Hannibal anticipates $700,000 shortfall


CONTRIBUTED/PIXABAY
By Hannibal Courier-Post
Posted: Jun. 5, 2020 6:32 pm Updated: Jun. 5, 2020 6:36 pm

HANNIBAL | Budget season is in the home stretch at Hannibal City Hall. However, the creation of a monetary blueprint for the next fiscal year has been particularly challenging in 2020, according to Hannibal's Director of Finance Karen Burditt.

“This year has been especially hard with all the unknowns and how COVID-19 will affect the city,” she said.

The preliminary budget presented the city council by Burditt on May 19 anticipated a drop in revenue.

“It shows a $710,550 deficit in the General Fund using the scenario of a 5% decrease in sales and use tax,” she said. “We have other options that we have reviewed if those percentages change.”

The fiscal forecast for the short-term future is bleak. In an interview late last month, James Bullard, St. Louis Federal Reserve Bank president, said he “expects the second quarter to be the worst in postwar U.S. macroeconomic history in terms of growth.”

The city of Hannibal will receive its second quarter sales tax revenue in July and August, according to Burditt.

“We are trying to be mindful of our revenue and expenses, and will continue to review monthly,” she said. “If at the end of the six months we feel we need to make further cuts or if we see the ability to add in some projects that were cut, we can do so with the city council's approval of a budget amendment.”

The 5% shortfall that Burditt is anticipating is significantly less than what she initially expected.

“When the early predictions of what the impact of COVID-19 could be, we looked at a 20% reduction in sales tax and reduction in other revenues,” she said.

Thus far those dire projections have not been realized.

“During the past two months we have not seen that hit that was predicted, and we have changed reduction in sales tax to 5% based on what others cities throughout Missouri are budgeting,” Burditt said.

Sales tax revenue is the lifeblood of Hannibal's city government. It accounts for about 37 percent of the revenue for the General Fund, which pays police, fire, the department of public works and administration expenses, according to Burditt. Sales tax is approximately 83% of the parks department's revenue and nearly 100% of the Sales Tax Capital Fund, which funds street projects and repairs, Burditt said.

 

 

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