Finance Director details Morgantown budget woes

MORGANTOWN, W.Va. – Even as reopening begins many organizations are still trying to quantify the economic damage. Revenue for the City of Morgantown has been free falling since business closures began on March 17.

Morgantown City Council initially approved a budget in March that included $39.7 million in revenue and expenses. About two weeks later in response to COVID-19 an amendment dropping revenue and expenses by $3.1 million was approved. Finance Director Jim Goff says revenues are plummeting, how far is the difficult question to answer.

The amendment included to deep cuts in projected revenue from items like the Municipal Service Fee, B & O tax, hotel tax and the Wine & Liquor Tax. Key cuts included in the amendment of expense side include elimination of cost of living increase, summer work crews, overtime, Travel & Training, pay increases and declining to fill numerous vacant positions. No layoffs or furloughs have occurred up to this point.

For the previous four years the city has given employees a cost of living increase.

“Specifically, Morgantown has not experienced a loss of WVU and that economic driver to all the businesses in Morgantown,” Goff said,”And at the end of the day the taxes they pay to the city”

The 32,000 WVU students have been away from campus for the last two months, driving revenues further down. Goff says trying to project what the effect on revenues has been a difficult, constantly changing task.

“A very rapid decline in economic activity right now, to try to put a value on that, we’ve estimated 30 percent,” Goff said,”For this June 30, 2020 quarter for our revenues to be down.”

In addition to the loss of students, Morgantown area businesses have also been impacted by the “stay at home and safer at orders” as well.

“They (the businesses) won’t submit their returns until July for this period of time,” Goff said,”So, we’re really not going to know how deep this loss is probably until the beginning to the middle of August.” Goff is concerned for the businesses in Morgantown and the surrounding areas.

A report from the Hechinger Report, a nonprofit, independent news organization says in cities like Ames, Iowa, the home of Iowa State University, officials are predicting a budget shortfall of more than $9 million. About half the Ames population of 67,000 is made up of students at Iowa State University, also a Big 12 school.

WVU students returning in the fall, along with fall sports would give the city many more options.

“If it’s (WVU) in session in the fall, we could be in a situation where we’re looking at budgets and bringing some of this spending back,” Goff said.

His focus has been on conserving cash reserves in order to continue to pay for essential services.

Funding options like the Hero Pay approved by the governor and paid out to the County have been requested by the City, but the County is awaiting guidance from the state on how this federal funding can be spent. There are spending restrictions on accepted federal funding.

“As this plays out we’ll be continually be looking at it and monitoring things,” Goff said,”Hopefully we’ll see improvement.”