ANCHORAGE, Alaska (AP) — The municipal government of Alaska’s largest city has projected a $17 million revenue shortfall for 2020 because of the economic impact of the coronavirus.
The loss represents 3% of the general government operating budget for Anchorage, The Anchorage Daily News reported on Saturday.
Lost tax revenue accounts for $14.4 million of the shortfall, the city said.
Anchorage Chief Financial Officer Alex Slivka said the city plans to reroute federal coronavirus recovery funds to fill most of the gap.
An ordinance proposed by Mayor Ethan Berkowitz’s administration would repeal part of the federal recovery funding package approved by the Anchorage Assembly, Slivka said.
The ordinance would reroute about $61 million of those funds to the payroll for first responders, freeing up general fund dollars that otherwise would have been used for payroll costs.
“You can use CARES grant funding to pay for public safety payroll, and then if that frees up any municipal general funds, those can be spent as you would ordinarily spend your money,” Slivka said.
The proposal includes rerouting a contingency fund of nearly $15 million, which Slivka said has so far not been allocated.
City budget documents show the largest impact from the virus has been on the city’s bed tax. Hotel and motel rentals were down 18% in the first quarter of fiscal year 2020, and 73% in the second quarter.
Vehicle rental tax revenue was down 74% in the second quarter of fiscal year 2020.
The city’s tobacco tax revenue remained level, while marijuana sales tax was projected to collect $500,000 more than last year.
The new spending proposal still leaves a projected $2 million shortfall, but Slivka said some spending has come in below budget through the remainder of the year and the city could work to cut costs.
For most people, the coronavirus causes mild or moderate symptoms, such as fever and cough that clear up in two to three weeks. For some — especially older adults and people with existing health problems — it can cause more severe illness, including pneumonia, and death.
The number of infections is thought to be far higher because many people have not been tested, and studies suggest people can be infected with the virus without feeling sick.