Cities impacted by lost sales revenue due to COVID-19

MOREHEAD CITY, NC (WITN) - As phased re-opening continues in North Carolina, more and more businesses are starting to re-open, but fewer shoppers throughout the pandemic mean less sales tax revenue.

With that, municipalities across the east are facing serious budget issues that have already cost employees their jobs in one city.

On Monday, the Town of Morehead City announced 10 full-time and 8-part time positions had been eliminated in the wake of the COVID crisis.

"The city is currently facing very serious financial impacts," says City Manager Ryan Eggleston, adding that impact requires "immediate action."

Eggleston said they expect to lose nearly $1.3 million in annual revenue mostly from sales tax.

But not all city leaders in the East are ready to take that same step just yet.

In Jacksonville, City Manager Richard Woodruff said, while they are unable to predict how much revenue they will lose, contingencies were put in place when they adopted their new budget back in April.

"Our plan consists of three levels. Each level assumes a $1 million loss in revenue from sales tax," says Woodruff. "None of those levels though include any of our employees being laid off."

Each level consists of certain items, with Woodruff hoping they don't get past level 2.

Greenville city leaders also say they have no plans to lay off or furlough employees at this time.

But uncertainty about the impacts from the pandemic creates a budgeting headache.

"Right now, we're looking at the availability of sales tax numbers for the month of March not coming in until the month of June," said Assistant City Manager Michael Cowin.

With a similar three-tier plan being considered in Greenville, Cowin said all they can do is prepare for the worst and hope for the best.

"Our goal is to probably be a little bit aggressive with our projections, knowing we can back off the accelerator if the worst does not occur," Cowin adds.

The City of Greenville leaders said, of their general fund, which is approximately $80 million, roughly 20% of that revenue comes from sales tax dollars.

New Bern city leaders also said that in the course of their due diligence when the pandemic started, there were discussions when it came to budgeting. But since then, they have not had any conversations about employee layoffs in New Bern either.