Fairfield officials ‘optimistic’ about budget for remainder of 2020: What they’re seeing

Fairfield city leaders planned for the financial worst in the early weeks of the coronavirus pandemic as they hoped for the best.

Now those city officials say the best appears to be happening.

“We’re in pretty good shape,” said City Manager Mark Wendling. “So far we’ve been weathering the storm really well, and our reserves remain really, really strong.”

Compared to 2019, the city’s general fund revenue is down approximately 1.5 percent. However, the total income tax collection is only down 0.81 percent. Income tax collection annually makes up between 75 to 80 percent of the city’s general fund revenues.

“We are optimistic that things are starting to return to a normal collection period to 2020,” said Fairfield Finance Director Scott Timmer.

In April, Timmer told City Council his finance office was anticipating declining revenues based on businesses shutting down and unemployment skyrocketing. He also advised the council to consider cutting departmental budgets. The city was preparing for a potential 8 percent drop in revenues, which was similar to what happened during the Great Recession more than a decade ago.

In June, City Council cut 3.8 percent, or $2.86 million, to its then-$75.6 million 2020 operating budget.

While total income tax collection dropped by $161,000, or 0.81 percent, through July over the same period in 2019, collections are up by $479,000, or 2.5 percent, through the first two quarters of 2020 over 2018. This due to a staffing change the city made in 2019.

Fairfield is down 16.4 percent in business tax collections through July over the same time period in 2019. Timmer assigned a city employee to focus on business tax collections last year, and that decision netted Fairfield $3.8 million in total business tax collection. Timmer said that “was the highest amount the city collected in business tax in its entire history.”

Last year’s business tax collection was a 28 percent increase over 2018, and year-to-date collections for 2020 are exceeding 2018 collections, which were under $2 million.

The city is also optimistic for the remainder of 2020 because withholding income tax is up 2.9 percent through July over 2019, though that’s attributed to an 11 percent increase in the first quarter of 2020. But as Ohio businesses continue to operate amid the COVID-19 pandemic, Timmer is “cautiously optimistic” the second half of 2020 could see modest gains.

“Withholding (tax) has remained strong for us,” Timmer said. “I would say we are cautiously optimistic that we are going to equal out in August, and actually potentially show a minor increase for the month of August, and then for all of 2020 compared to 2019.”

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