The Novel Coronavirus is hitting the city on every front, including finances. Lexington Mayor Linda Gorton did not sugar coat her proposed budget for the upcoming fiscal year. She doesn’t like it. “No one does. This is crisis budget. Not much different than one in wartime. That’s not an exaggeration.”
The $372 million spending plan unveiled this/Tuesday morning includes city-wide cuts of more than $12.6 million. Six million has been cut from social services and outside agencies. There will be a hiring freeze and no raises unless required under contract. There was some good news in the plan. “To make up for the projected drop of over 10% in our general fund revenue I am not proposing any kind of tax increase. Savings related to employees add up to over $7.5 million. We are not laying off permanent employees.”
Gorton confirmed a predicted $40 million revenue shortfall in the upcoming fiscal year. She proposed utilizing city savings accounts and contingency funds to help along with cuts across the board. Borrowing will also be limited. Gorton said closures because of the coronavirus have “decimated major revenue sources and it will take years to recover.” However, the mayor said this budget ensures that the city will not have to declare bankruptcy.
Cuts include but aren’t limited to the affordable housing fund, Commerce Lexington, LexArts (but a one-time dollar for dollar matching grant up to $200k is available), the Explorium and the Lexington History Museum.
Council Reactions
Mayor Linda Gorton's budget proposes millions in reductions both inside and outside city government as Lexington grapples with dramatic swings in revenue due to COVID-19, but some on the city council worry the projections might still be too rosy.
While Urban Council Council members mostly applauded the mayor's work in paring down the numbers amid an unprecedented spike in unemployment, some expressed concerns about underestimating the ongoing impact of the outbreak.
"Given all those layoffs, all those people not working, we'll only go down in the big four (accounting firms) 9.87 percent?" Farmer asked during a virtual meeting of the council Tuesday. "I'm not trying to go to the dark side, but that just doesn't seem like it's very much in relation to the downturn."
Councilman Richard Moloney piggybacked on those concerns, adding, "I don't want to underbudget this and I'm afraid we may be doing that."
But other reductions drew some scrutiny — for example a $6 million cut to external agencies, including ESR grants. Those are extended social resource dollars, which help fund social services ranging from youth development to emergency shelter and nutritional access in the city. Council member Angela Evans said she fears, even with some federal dollars, the hit could be too big for some providers.
"Just totally zeroing it out I have big concerns about," she warned. "Because this will just totally wipe a lot of them out."
Unemployment claims in Lexington jumped to more than 18,200 last month. In March of 2019, there were just 408 claims.
