The budget was discussed in a workshop held at the Elizabethton Electric Department conference room on Hatcher Lane. It was the first time in two months that members of the Elizabethton City Council met together after holding remote electronic meetings in April and May.
Estes told council members “we have cut enough that we can survive.” He said that if the revenues do not decline by as much as the budget is projecting, more can be returned to the budget later in the year.
The reason for the uncertainty is because the city has not received the figures for the April sales tax collections yet. Many stores not classified as essential were closed during that time and many retail businesses saw their sales drop substantially during the social distancing and quarantine initiatives.
Several council members and staffers said they had a feeling the April and May sales tax collections would not be bad. Mayor Curt Alexander said he had spoken with some retail grocery managers who told him that business was much better than normal, as people bought groceries locally instead of frequently going to restaurants throughout the region.
But the city is taking a conservative approach on the General Fund budget and anticipating a major shortfall in revenue over the last few months of the year. General Fund revenue from the local option sales tax was decreased over the 2019-20 budget by $388,650. The property tax rate was dropped by $63,965 because of a recalculation of property tax allocation.
The impact of COVID-19 was expected to also result in a decline of $73,348 in state contributions to the city.
There was also a decline of $566,761 because of a change in accounting for Elizabethton Electric Department reimbursements to the General Fund.
In these and other areas, the total revenue for the city’s General Fund for 2020-21, dropped by $2,185,818. That was a decline from the original budget for 2019-20 of $19,536,405 to the 2020-21 total of $17,350,587.