Six months after the COVID-19 pandemic hit, uncertainty remains as local governments struggle to shore up coffers pinched by declining tax revenue, but town leaders say the worst appears to be in the past.
With the exact fiscal impact not known for another few weeks, when localities start budget reviews, local municipal officials said the decline of meals taxes and cancelled festivals due to fear of spreading the virus hurt financial spreadsheets. However, officials in Buchanan, Fincastle and Troutville said recent months receipts are better financially than in the first and second quarters of 2020.
However, officials in Buchanan and Troutville said there have been benefits from COVID-19 by way of increased state and county assistance to help combat the deadly virus that has killed more than 200,000 Americans and infected millions, including 290 cases, 23 hospitalization and 10 deaths in Botetourt County as of Monday morning, according to the Virginia Department of Health.
Local municipality officials agreed towns could not handle the pandemic on their shoestring budgets, so financial help to purchase much needed equipment to combat the virus, from state and federal officials by way of the $2.2 trillion economic stimulus Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, was manna from heaven. Dollars that head towards local municipalities go straight into the local economy, an injection of sorts. “We know that local leaders are taking the most significant hit – cities [and towns] of all sizes are the backbone of the nation’s economy. Local governments are the economic engines of the economy,” the National League of Cities stated in a report about COVID-19’s impact on local governments.
Locally, one town manager said COVID-19 “really flipped everything on its head,” as a way to describe the impact on towns. While another local official said it’s been “definitely a challenge” dealing with the virus.
Buchanan, the largest town in Botetourt County, saw its meals tax, occupancy tax and income from summer festivals dip as tourists stayed home. Town leaders will receive a budget review at their Oct. 8 meeting town which will reflect the impact COVID-19 had on its nearly $1 million operating budget, said Jason Tyree, the town manager. He explained the impact could be hefty. The town has approximately a dozen bed and breakfasts, and several festivals that bring in a large slice of the town’s budget, including Buchanan’s annual Carnival, which brings in close to $100,000 annually. “In the past, we used that money for the fire department and parks,” he said of the festival income.
Tyree said tax collection has began to pick up starting in mid-July after a few months of brutal declines. The virus “really flipped everything on its head,” he said. Buchanan has several autumn events planned, including a Trunk or Treat and a Fall Market, but is waiting for guidance from the state’s Department of Health on how to proceed.
Under the CARES Act, the town received approximately $15,000. With the additional funds, it purchased a conference phone system which allows citizens to now call a number to listen in to governmental meetings. It also purchased a power washer for the public works department which will be used to clean playground equipment a couple times weekly and soon the town’s website will be unpadded so residents can pay their water bill online. “It’s been difficult, but COVID-19 has allowed the town to address some of its technology issues” with CARES Act funds, he said.
Tyree said Buchanan is luckier than other municipalities as its nearly $1 million reserve gives it a wide comfort zone compared to other small towns. “With smaller budgets it can be difficult,” he said.
Fincastle’s budget is smaller than Buchanan’s, at $140,000 annually for its general operating fund, said Town Manager David Tickner.
“We’re off by 10 to 15 percent,” he said of the COVID-19 impact on the town’s coffers. To offset the losses, the town is cutting back on spending, mainly on office suppliers and some infrastructure work. The town’s outlay isn’t heavy, its two part-time employees’ salary is the bulk of the budget. The Town Office and Big Spring Park are properties Fincastle owns. The town owns the sewer plant, but it’s under contract with an operator.
Tickner said the town has experienced a small decrease in meals taxes, offset some by the new businesses, including new eateries that have opened during pandemic – a new café and a rooftop bar. Fincastle did not receive any of the CARES Act funding for equipment or technology.
Like Buchanan, Fincastle witnessed the cancellation of festivals this summer, including the popular 4th of July fireworks, which draws upwards of 1,500 people, and the revived Fincastle Festival. Tickner hopes the town will be able to hold its annual Trick or Treat and Christmas Parade this year.
While the area is still battling the virus, Tickner observed a positive during this time of face mask and social distancing. “I see folks coming closer together. We’re seeing people checking up, watching out for each other even if it’s only a phone call,” he observed.
Mayor David Horton said Troutville is doing fine in the midst of a pandemic. “I’m looking out my office window at the grocery store and it’s booming,” he said. Troutville’s sole restaurant, The Pomegranate, caught fire before the pandemic hit, so the town was adjusting without the meals tax. A chunk of the town’s $122,000 budget comes from a franchise tax that the two banks pay and business licenses, said Horton.
The town’s budget has taken a hit in park rentals, he said. Horton said the town has three employees – two full-time and one part-time – and if any cuts are needed, they will be small. “We don’t buy a lot,” he said.
From the CARES Act, Troutville received a $7,000 power washer to help clean the park.
“All and all, we’re not in bad shape,” he said.